Southeast Asia Needs More Power, But Its Weak Grid Could Be a Problem

The war in Iran has exposed a critical vulnerability in Southeast Asia's energy markets. The region is heavily dependent on fossil fuel imports, and demand is continuing its steep growth trajectory even as global crude oil prices remain punishingly high. Though the Strait of Hormuz is finally reopening, restoring flows of crude oil out of the Persian Gulf and toward Asian buyers, global oil markets have a long road toward recovery. Luckily, the wheels are already in motion to electrify the continent and move away from heavy dependence on imported oil and gas, but the interim will be a rocky chapter for energy security in the rapidly developing region. When the Strait of Hormuz initially closed in February, in response to the United States and Israel's military campaign in Iran, Asian markets were hit hard and hit early by the cutoff.