The war between Israel and Iran has underscored Asia's heavy reliance on oil and gas from the Middle East and its sluggish progress in transitioning to renewable energy — vulnerabilities made worse by the region's dependence on shipments passing through the Strait of Hormuz.
The Strait of Hormuz, bordering Iran, is a critical route for nearly 20% of global oil and liquefied natural gas (LNG) supplies. China, India, Japan, and South Korea collectively account for 75% of those imports.
According to research group Zero Carbon Analytics, Japan and South Korea are the most exposed to risks from disruptions in the strait, followed by India and China, all of which have been slow to scale up renewable energy.
In 2023, renewable energy contributed only 9% of South Korea’s electricity generation, significantly below the 33% average among OECD countries. Japan, meanwhile, remains the most fossil-fuel-dependent nation among the G7.
A fragile ceasefire following the 12-day Israel-Iran conflict has eased immediate concerns. But energy experts stress that reducing fossil fuel dependence and accelerating the transition to clean, domestic energy is the only long-term solution to mitigate these risks.
“These are serious threats that countries need to take into account when considering energy and economic security,” said Murray Worthy, a researcher at Zero Carbon Analytics.
Japan, South Korea most vulnerable
While China and India are the largest importers of oil and LNG through the Strait of Hormuz, Japan and South Korea face higher vulnerability due to their dependence on imported fossil fuels. Japan meets 87% of its energy demand through imports, while South Korea imports 81%, according to energy think tank Ember. In comparison, China imports 20% of its energy needs, and India 35%.
“When you combine the volume of energy flowing through the strait with the countries’ overall reliance on oil and gas, Japan ranks as the most vulnerable,” Worthy explained.
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Roughly 75% of Japan's oil imports and over 70% of South Korea's oil imports — along with one-fifth of its LNG supply — transit the strait, according to Sam Reynolds of the Institute for Energy Economics and Financial Analysis (IEEFA). Both nations have prioritized diversifying fossil fuel suppliers over shifting to renewables.
Japan aims to meet 30-40% of its energy demand with fossil fuels by 2040 and continues to invest in new LNG infrastructure. South Korea plans to reduce its LNG share in electricity generation from 28% to 25.1% by 2030, with further cuts to 10.6% by 2038.
Experts say Japan and South Korea must significantly ramp up solar and wind installations to meet their 2050 net-zero targets. According to think tank Agora Energiewende, both countries need to add around 9 gigawatts of solar capacity annually by 2030. Japan also requires 5 gigawatts of new wind power each year, while South Korea needs 6 gigawatts.
However, Japan's energy policies have been criticized for lacking consistency. The country still subsidizes fossil fuels, supports overseas oil and gas projects, and faces regulatory hurdles in offshore wind development. Its hydrogen fuel initiatives, largely reliant on natural gas, have also drawn criticism.
“Japan hasn’t done enough. Their energy transition strategies are far from ideal,” said Tim Daiss of the APAC Energy Consultancy.
In South Korea, artificially low electricity prices limit profitability for solar and wind projects, discouraging investment in renewables. Reforms in energy pricing and stronger policy support are necessary to accelerate the transition, said Kwanghee Yeom of Agora Energiewende.
China, India making progress — but gaps remain
China and India have taken more steps to reduce their exposure to energy market volatility and trade disruptions.
China led global growth in solar and wind energy in 2024, with solar capacity increasing by 18% and wind by 45%. The country has also expanded domestic gas production, though its reserves are depleting.
China has managed to reduce LNG imports through increased domestic production, but remains the world's largest oil importer, with nearly half of its more than 11 million barrels per day sourced from the Middle East. Other key suppliers include Russia and Malaysia.
India remains heavily reliant on coal, with plans to increase coal production by 42% by 2030. Nonetheless, its renewable energy sector is expanding rapidly, adding 30 gigawatts of clean power last year — enough to supply nearly 18 million homes.
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Diversifying oil imports from the U.S., Russia, and other Middle Eastern nations has helped lower India’s exposure to disruptions, but energy security still hinges on accelerating renewable deployment, said Vibhuti Garg of the IEEFA.
Wider risks across Asia
A blockade of the Strait of Hormuz would have broader repercussions across Asia, where many countries are now net oil importers. Building renewable energy capacity is seen as a key safeguard against the volatility of fossil fuel markets, said Reynolds of the IEEFA.
Southeast Asia has become a net oil importer as domestic production in countries like Malaysia and Indonesia fails to keep pace with growing demand, according to the ASEAN Centre for Energy. While the region remains a net LNG exporter due to output from Brunei, Indonesia, Malaysia, and Myanmar, demand is expected to outstrip supply by 2032, turning the region into a net LNG importer, says consultancy Wood Mackenzie.
Renewable energy growth is failing to keep up with soaring demand, and aging oil and gas fields are contributing to declining output.
The International Energy Agency warns that ASEAN's oil import bill could surge from $130 billion in 2024 to over $200 billion by 2050 without stronger clean energy policies.
“Clean energy is not only vital for addressing climate change — it is fundamental to national energy security,” Reynolds emphasized.