Southeast Asia’s electricity demand is projected to grow at an average annual rate of 5.4 per cent between 2026 and 2030, while coal demand is expected to rise 4.4 per cent a year, the fastest growth of any region globally, as cooling, data centres, industry and wider electrification drive energy consumption, according to the International Energy Agency (IEA).
The region’s growing energy needs are increasing its exposure to disruptions in imported fuel supplies and strategic shipping routes. The vulnerability was underscored by the West Asia energy crisis, which sharply disrupted liquefied natural gas (LNG) flows through the Strait of Hormuz. During the first eight months of 2026, LNG flows through the strait fell by close to 65 per cent year on year, while deliveries to ASEAN countries through the route declined by around 75 per cent. There were no deliveries from Qatar or the United Arab Emirates between April and August.
Affected LNG importers responded by increasing spot market procurement rather than curtailing imports, with the United States and Australia supplying the largest share of replacement cargoes from outside the region. Yet ASEAN’s combined LNG imports still increased by around 20 per cent year on year during the first eight months of 2026, highlighting the region’s limited scope to reduce its reliance on gas even amid elevated prices.
The IEA, in its ASEAN Energy Security Review, said the crisis has highlighted vulnerabilities that are becoming more significant as Southeast Asia’s energy demand expands. Regional energy demand has increased 40 per cent since 2015, while electricity demand has risen more than 60 per cent. About 97 per cent of households now have access to electricity, putting ASEAN on track for universal access by 2030.
The region’s exposure extends beyond gas. Regional crude oil production has fallen 40 per cent from its peak in the 1990s, while crude imports have risen more than 30 per cent since 2015. Gas consumption is projected to increase by more than 3 per cent annually in the coming years, while net oil product imports are expected to rise around 5 per cent between 2025 and 2031. The IEA said these trends, alongside exposure to strategic maritime routes, climate risks and concentrated clean energy supply chains, are increasing the range of energy security risks facing ASEAN.
Southeast Asia’s total energy demand has increased by more than 40 per cent since 2015, while electricity demand has risen by more than 60 per cent. About 97 per cent of households now have access to electricity, putting the region on track to achieve universal access by 2030.
In 2025, coal and oil each accounted for around 30 per cent of ASEAN’s total energy supply, equivalent to 540 million tonnes of coal and roughly 9 million barrels per day of oil. Natural gas accounted for close to one fifth, or about 200 billion cubic metres. Bioenergy and waste contributed around 12 per cent, wind, solar and other renewables around 7 per cent, and hydropower around 3 per cent. Liquefied Petroleum Gas accounted for about 5 per cent of total final consumption, or around 300 million barrels of annual consumption. The data are from the IEA’s World Energy Balances, accessed August 1, 2026, with 2025 figures including estimates.
Oil demand in ASEAN rose by an average 1.7 per cent annually between 2015 and 2025, almost twice the global average. The region’s share of global oil consumption increased from 6.2 per cent in 2015 to 6.8 per cent in 2025. Its oil consumption increased by 1.1 million barrels per day over the decade, accounting for one eighth of the global increase.
The West Asia conflict has temporarily reversed this growth. ASEAN oil demand is now expected to decline by 150,000 barrels per day, or 2.1 per cent, in 2026, compared with pre conflict expectations of growth of around 160,000 barrels per day. Regional demand fell by 330,000 barrels per day in the second quarter of 2026, while net product imports dropped 10 per cent against an already weak baseline.
The IEA expects demand to recover by 320,000 barrels per day in 2027, although this would recover only part of the growth lost in 2026. Over 2025 to 2031, ASEAN oil demand is expected to grow by an average 1.8 per cent, or 130,000 barrels per day, annually. More than 80,000 barrels per day of this increase is expected to come from premium refined fuels, particularly diesel and jet fuel.
Indonesia, the region’s largest economy and oil consumer, has demand approaching 2 million barrels per day and is expected to account for an average increase of 70,000 barrels per day between 2025 and 2031, equivalent to a compound annual growth rate of 3.3 per cent. Viet Nam’s oil demand is expected to grow 3.7 per cent annually. ASEAN is expected to become the single largest regional contributor to oil demand growth in the medium term, with its growth exceeding that of India despite having less than half India’s population.
The ASEAN region received more than two thirds of its LNG imports from outside the region in 2025. Australia and Qatar together accounted for around 65 per cent of extra regional LNG imports and 45 per cent of total LNG imports into ASEAN member states.
The Strait of Hormuz has therefore become a critical vulnerability. Around 20 per cent of ASEAN’s LNG imports, or 7.7 billion cubic metres, passed through the strait in 2025. The disruption during 2026 forced importers to turn to alternative suppliers and spot market purchases.
The region is also exposed to the Strait of Malacca, which links the Indian Ocean with the Pacific Ocean through the South China Sea. At its narrowest point, the strait is just 3 kilometres wide. Unlike Hormuz, it can be bypassed through the Sunda and Lombok straits, although alternative routes add sailing time and costs.
The ASEAN region as a whole remains a net exporter of natural gas, with a surplus of around 30 billion cubic metres in 2025. However, Singapore, Thailand, the Philippines and Viet Nam were net importers. Singapore was fully dependent on imported gas, while import dependency is projected to reach close to 40 per cent in Viet Nam, 60 per cent in Thailand and 80 per cent in the Philippines by 2030.
ASEAN is expected to record the world’s fastest growth in coal demand, at 4.4 per cent annually on average through 2030. Indonesia and Viet Nam account for most of the increase. By 2029, Indonesia is expected to become the world’s third largest coal consumer after China and India, surpassing the United States.
Coal demand is underpinned by electricity generation, which accounts for about 75 per cent of overall coal consumption, with industry accounting for the remainder. Strong electricity demand, coal availability and affordability, long term power purchase agreements and industrial use are expected to keep demand resilient.
The recent West Asia crisis could further reinforce coal’s role in some markets. The IEA said ASEAN countries may reassess the role of LNG after the crisis. In March 2026, the Philippines invoked emergency powers to regulate electricity prices, increase coal fired generation and secure assurances from Indonesia on additional coal exports. Thailand similarly instructed power plant operators to increase coal use and ordered the restart of two decommissioned units at the 0.6 GW Mae Moh coal fired power plant.
Indonesia’s nickel processing and refining sector is another driver of coal demand. The country produces around 60 per cent of global nickel supply and has more than 50 nickel smelting facilities. Most nickel production relies on rotary kiln electric furnace technology, which uses thermal and metallurgical coal as a process input and for heat and electricity. Aluminium smelting in North Kalimantan is also expected to add around 30 terawatt hours of baseload electricity demand.
The energy transition is creating new supply chain vulnerabilities alongside the risks associated with fossil fuels. The IEA said the Middle East crisis has increased energy and logistical costs for mining and processing operations, while global capital expenditure on critical mineral projects fell by 9 per cent year on year in 2025.
Battery cell manufacturing capacity across ASEAN increased from 16 GWh in 2023 to 26 GWh in 2024, while committed projects could take capacity above 80 GWh by 2030. The region is the world’s leading nickel producer and has the largest refined rare earths production facility outside China. However, inadequate processing and refining capacity means ASEAN countries remain dependent on imports of critical minerals in forms ready for technological applications.
The West Asia crisis has also exposed a less visible vulnerability in critical mineral supply chains. ASEAN supplies around one quarter of global sulphur, while half of global seaborne sulphur trade passes through the Strait of Hormuz. Sulphur is required to produce sulphuric acid, which is used in fertiliser production and in processing copper, lithium, cobalt, nickel and rare earths.
Indonesia’s nickel refining industry is particularly exposed because around 75 per cent of its sulphur supply comes from the Middle East. Indonesian sulphur imports rose to 5.35 million tonnes in 2025, around 48 per cent higher than the 3.6 million tonnes imported in 2024. Disrupted sulphur supplies also prompted China to curb sulphuric acid exports in May 2026, pushing up costs for critical mineral production.
The IEA said ASEAN’s energy security will increasingly depend on diversifying supply sources and transport routes, strengthening emergency preparedness and regional cooperation, improving electricity system flexibility and accelerating energy efficiency and electrification.
The ASEAN Power Grid, the Trans ASEAN Gas Pipeline framework and the ASEAN Framework Agreement on Petroleum Security provide existing mechanisms for regional cooperation. The review also calls for stronger information sharing, market monitoring, emergency procedures, strategic stockholding and regional support mechanisms.