The Iran war sparks partnership in Asia
More than any other region, Asia has felt the knock-on effects of the Iran war in energy supplies. Before the conflict began in February, some 80% of the oil shipped through the Strait of Hormuz went to Asian buyers. In recent weeks, as those supplies have dwindled, the region has endured blackouts, fuel rationing, and dozens of protests, from South Korea to the Philippines to India.
The expectation was that each country would turn inward to protect petroleum supplies.
Not so. With a population of more than half of humanity, Asia has shown a great deal of humanity in tackling the crisis together. 鈥淣ow that they are hostage to events thousands of miles away,鈥� reported The Economist, 鈥渢he squabbles that frequently break out between Asian neighbours no longer look quite such a threat.鈥�
Trust, unlike oil, has not been in short supply. To be sure, each nation has acted quickly to reduce energy demand and seek alternative oil supplies from Russia, the United States, and Africa. In India, office employees were asked to work from home. In the Philippines, air conditioning was limited in public buildings. In Vietnam, many drivers of three-wheeled vehicles (rickshaw) bought electric versions.
On a regional level, however, South Korea, a major source of refined oil products, agreed with a few countries not to limit such exports. Japan offered $10 billion to help Southeast Asia enhance its energy security. Energy ministers from that corner of Asia also agreed to speed up plans to integrate their electric grids and share energy from renewable sources, such as solar and hydropower.
The Asian Development Bank plans to spend $50 billion for a Pan-Asian power grid by 2035.聽 On May 30, seven countries in Asia agreed to secure subsea energy-transmission infrastructure, such as electricity and petroleum lines.
In one example of heightened confidence between nations, Singapore, a key hub of energy trading, agreed not to restrict the flow of refined fuel to New Zealand in exchange for secure food supplies from that agriculture-rich nation. The pact is legally binding.
鈥淚t takes a longstanding trust and it turns it into really practical action, a commitment to keep essential trade flowing in a crisis,鈥� said New Zealand Prime Minister Christopher Luxon.
The pact sets a new standard for shared resilience. Singaporean Prime Minister Lawrence Wong welcomes other countries to join. 鈥淚t will start to expand a network of trusted partners who can provide similar assurances to one another,鈥� he said. The rest of Asia might be tempted.
