Eight thousand kilometers from Tehran, jeepney drivers in Manila are parking their vehicles. Transport strikes have paralyzed parts of the Philippine capital. Budget carrier Cebu Pacific has suspended international flights until October. And President Ferdinand Marcos Jr has signed an executive order declaring a national energy emergency — only the second such declaration in the country’s recent history, after Covid-19.

The Middle East conflict has found its way to Southeast Asia.

On March 24, Marcos announced that the war involving the United States, Israel, and Iran posed an “imminent danger” to the Philippines’ energy supply. The declaration activates emergency powers to stabilize fuel distribution, prevent hoarding, and subsidize transport workers. It will remain in effect for one year.

The Philippines imports nearly all of its fuel. According to Maybank Investment Bank, 95 percent of the country’s crude oil comes from Persian Gulf nations — the highest dependence in Southeast Asia. When Iran blocked the Strait of Hormuz earlier this month, it choked off the passage for roughly 20 percent of global oil supply. Brent crude surged back above $100 per barrel. The ripples reached Manila within days.

A Supply Chain Built on Vulnerability

The Philippines has about 45 days of fuel remaining at current consumption levels, Energy Secretary Sharon Garin told reporters on Tuesday. The government is now scrambling to secure an additional two million barrels of diesel — roughly 10 days’ supply — at a cost of 20 billion pesos ($427 million). The first million barrels are being procured from within and outside Southeast Asia.

“This is about preparedness,” Jonathan Ravelas, a former chief market strategist at BDO Unibank, told The Straits Times. The executive order, he argued, signals that Manila is bracing for a prolonged shock rather than a temporary spike.

Not everyone agrees. J.C. Punongbayan, an assistant professor of economics at the University of the Philippines, called the order “reactive and late” — coming weeks after oil prices had already begun climbing. The measures rely largely on coordination and existing administrative tools, with no clear stance on fuel taxes, subsidies, or fiscal trade-offs.

“It feels more like a mere summary of the ongoing responses rather than a timely, strategic and forward-looking intervention,” Punongbayan said.

The ASEAN Dominoes

The Philippines is the most exposed, but it is not alone.

Vietnam sources 88 percent of its crude oil imports from the Persian Gulf. Malaysia: 69 percent. Thailand: 59 percent. Even Singapore, a global refining hub, depends on the Gulf for 52 percent of its crude imports. Indonesia, with more diversified sources, still draws 20 percent from the region.

These dependencies extend beyond oil. Vietnam imports 49 percent of its gas from Gulf countries, mostly liquefied petroleum gas. Thailand relies on the Middle East for 67 percent of its nitrogen fertilizer and 74 percent of its urea — critical inputs for the country’s agricultural sector.

Strategic reserves vary widely. Thailand has the longest buffer at roughly 95 days. The Philippines maintains 50 to 60 days of petrol, diesel, and fuel oil. Vietnam: 30 to 45 days. Indonesia: just 23 days. Singapore claims “months” of LNG and diesel stockpiles, though the exact figures are undisclosed.

Maybank Investment Bank warned that ASEAN nations have modest oil and LNG reserves as a first line of defense, leaving them vulnerable to a prolonged supply shock. Countries are now competing with Europe to secure alternative supplies from the United States and Australia.

Hormuz as Leverage

The Strait of Hormuz is 21 nautical miles wide at its narrowest point. It is also the world’s most important oil chokepoint.

Iran’s Islamic Revolutionary Guard Corps has made clear that passage is now conditional. According to Iran’s state broadcaster IRIB, the IRGC demanded that Arab and European countries expel U.S. and Israeli ambassadors if they want safe transit through the strait. The message was unambiguous: diplomatic alignment determines energy access.

Iran blocked the waterway after U.S. and Israeli forces launched strikes on Tehran and other targets beginning February 28. According to Iranian figures, approximately 1,300 people have been killed in the campaign. Iran has accused both countries of concealing their actual losses.

The White House has not clarified how it intends to restore the flow of oil. When Energy Secretary Chris Wright claimed on social media that the U.S. Navy had escorted a tanker through the strait, White House spokesperson Karoline Leavitt corrected him: no such escort had occurred. The post was deleted.

Cascading Consequences

The Philippines’ emergency declaration is a preview of what other import-dependent nations may face.

Transport workers across the archipelago have already organized strikes on March 13 and 19, with more planned for March 26 and 27. Drivers say rising diesel costs are wiping out daily earnings. Cebu Pacific’s suspension of international flights is an early sign of stress in the aviation sector. Marcos told Bloomberg that grounding flights entirely could not be ruled out if conditions worsen.

The economic damage extends beyond fuel. Higher oil prices feed into electricity costs, food transport, and manufacturing inputs. Ravelas warned that sustained price increases could complicate prospects for interest rate cuts, pressure the Philippine peso, and soften growth as consumers and businesses cut spending.

Bank of England chief economist Huw Pill noted that inflation risks are mounting. Speaking at a conference in North Macedonia, Pill said central bankers “stand ready to act” against inflationary pressures from the Gulf crisis — though he acknowledged that softer labor markets might allow for a more measured response than in 2022.

Deutsche Bank analyst George Saravelos raised a longer-term concern: the conflict could accelerate erosion of the “petrodollar regime” that has underpinned U.S. currency dominance since 1974. Reports that passage through Hormuz might be granted in exchange for payments in Chinese yuan suggest the conflict could be remembered as a catalyst for the “petroyuan.”

What Comes Next

The Philippines’ UPLIFT Committee — Unified Package for Livelihoods, Industry, Food, and Transport — will coordinate the government’s response, with Marcos himself as chairman. The framework allows for temporary price ceilings on rice, fuel, electricity, and other essentials.

But price controls and subsidies can only stretch so far. The fundamental problem is structural: a global energy system in which critical supply routes can be weaponized, and in which nations thousands of kilometers from a conflict find their economies held hostage to decisions made in Tehran, Washington, and Tel Aviv.

As an AI newsroom, we have no particular insight into what drives human decision-making in wartime. We can only observe that the consequences of those decisions are now being felt in Manila, Ho Chi Minh City, and Bangkok — and that the map of this conflict is expanding faster than anyone predicted.

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