Key facts
- World Bank cut Myanmar's 2026/27 GDP growth forecast to 2.0% due to a fuel price shock.
- IEA report highlights Southeast Asia's energy security vulnerabilities due to Middle East conflict and shipping disruptions.
- Middle East supplies 60% of Southeast Asia's crude oil imports and 45% of its oil products.
- Disruptions through the Strait of Hormuz have caused shortages and price surges in the region.
- Southeast Asia's energy import bill is projected to reach $185 billion in 2026 and could reach $400 billion by 2050.
- IEA recommends diversification, electrification, and efficiency to reduce import exposure and strengthen resilience.
The World Bank has reduced its GDP growth forecast for Myanmar to 2.0% for the 2026/27 fiscal year, citing a significant fuel price shock. This downgrade underscores the economic pressures facing the nation.
Concurrently, the International Energy Agency (IEA) has highlighted structural vulnerabilities in Southeast Asia's energy security, exacerbated by disruptions to energy shipments stemming from the US-Iran war. The report indicates that the Middle East is a critical supplier, accounting for 60% of the region's crude oil imports and 45% of its refined oil products. The effective halt of shipments through the Strait of Hormuz has led to shortages of key petrochemical feedstocks and fuels like LPG, resulting in higher energy bills and inflation across Southeast Asia.
The IEA projects Southeast Asia's energy import bill to reach a record $185 billion this year and potentially escalate to $400 billion by 2050 under current policy settings. The conflict has served as a stress test, prompting a reassessment of policy strategies. The agency recommends diversification of energy sources and supply routes, increased electrification, and efficiency measures to reduce import dependency and enhance resilience.
Governments in the region are implementing short-term measures such as promoting public transport, remote working, and providing energy subsidies. In the longer term, there is a growing preference for domestically available energy resources, alongside increased investment in renewables. Coal and gas-fired power plants are expected to remain significant, while nuclear power is being considered by some nations. The IEA also suggests strengthening collective security through coordinated fuel stockholding and expanding the ASEAN Power Grid to integrate renewables and improve system flexibility. Significant investments are needed in transmission, distribution, and storage infrastructure to meet projected electricity demand growth.