ASEAN Amid the Strait of Hormuz Crisis: A Test of Resilience in Energy and Fertilizer Supply Chains

A Supply Chain Stress Test Connecting East and West

The Strait of Hormuz carries about one-third of the world's liquefied natural gas and more than one-fifth of its crude oil trade, and is also a key transport route for bulk fertilizer raw materials such as urea, ammonia, and sulfur-based products. In March 2026, the closure of this waterway due to the Middle East conflict directly triggered a dramatic shock to the global energy landscape. The Food and Agriculture Organization of the United Nations (FAO) policy monitoring tool FAPDA recorded 585 policy actions in March, of which about 29% were related to the Middle East conflict—for ASEAN, which is highly dependent on Gulf energy and fertilizer inputs, this was not just a price fluctuation, but an extreme stress test for regional supply chains, food security, and institutional coordination.

ASEAN Countries Respond in Emergency: From Price Caps to Nationwide Energy Conservation

Faced with sharply rising energy prices, ASEAN countries showed a highly consistent policy response in the short term, but the specific tools and intensities varied by country. The Philippines was the first country in the crisis to declare a "national energy emergency," a symbolic move that quickly shifted administrative resources toward price stabilization and demand management. In response, Cambodia, Thailand, and Vietnam imposed price caps on gasoline, diesel, and even aviation fuel; Vietnam also temporarily suspended most-favored-nation import tariffs on petroleum products to reduce import costs.

In terms of subsidies and fiscal transfers, Indonesia and Malaysia adopted more targeted support schemes. Indonesia not only increased fuel subsidies but also expanded the mandatory blending ratio for biodiesel, attempting to offset import dependence with domestic resources; Malaysia introduced fuel quotas and purchase restrictions, while promoting work-from-home arrangements for civil servants to reduce consumption. The measures in Myanmar and Thailand were equally representative: Myanmar implemented an alternating-day driving system, while Thailand provided fertilizer subsidies and set fixed price caps for farmers.

Notably, many ASEAN governments included "energy-saving administration" in their emergency toolkits. Nine countries—Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam—all adopted remote work arrangements for civil servants and restricted non-essential travel. Laos even implemented short-term school closures to reduce electricity demand. This kind of demand-side management measure has rarely been seen in previous ASEAN energy crises, indicating that countries are beginning to realize that simple import substitution is no longer sufficient to close supply gaps in a timely manner.

Fertilizer Shortage: The Hidden Risk to Food Security

Compared with oil prices, the impact of the fertilizer supply disruption was more delayed, but its potential implications were far more profound. According to FAO reports, approximately 1.3 million tons of fertilizer were unable to transit through the Strait of Hormuz each month, with no viable overland alternative route. ASEAN countries are among the world's largest fertilizer importers, and major crops such as rice and oil palm are highly dependent on potash, phosphate, and nitrogen fertilizers. Thailand directly provides a $42 organic and chemical fertilizer subsidy to each eligible farmer; the Philippines, meanwhile, has rolled out a direct subsidy scheme to ease cost pressure. Laos indirectly supports agricultural production by reducing fuel excise taxes; Vietnam, while canceling petroleum tariffs, is also closely monitoring fertilizer import logistics. More interestingly, some countries are attempting to simultaneously address energy and agricultural input issues by promoting the development of bioethanol and biofuels, which highlights the room for policy innovation in the region within the “food–energy–water” nexus.

However, ASEAN has not yet established a common agricultural policy fund or a unified fertilizer reserve system like the EU. Member states mostly rely on bilateral trade or ad hoc market arrangements to solve problems, which undoubtedly increases the risk of fragmentation in the region’s overall response.

Reorientation of Regional Supply Chains and Long-Term Resilience Building

From the perspective of the ASEAN Economic Community (AEC), this crisis reflects ASEAN’s vulnerability to external dependence on critical materials. In addition to energy and fertilizers, the Middle East conflict could also disrupt ASEAN’s shipping routes to Europe and South Asia, lengthening delivery times and pushing up logistics costs. Although China and India play the role of “buffers” in the energy market, ASEAN lacks effective strategic petroleum reserve sharing mechanisms and fertilizer emergency allocation arrangements, leaving member states to fend for themselves.

On the positive side, this crisis has also accelerated signals of supply chain restructuring within ASEAN. On the one hand, some countries are accelerating biofuel and renewable energy plans to reduce long-term dependence on imported fossil energy. Indonesia’s palm-oil-based biodiesel and Thailand’s sugarcane ethanol have both gained greater policy space for development. On the other hand, disrupted fertilizer logistics are prompting ASEAN’s agricultural sector to rethink “localized” fertilizer production, such as using regional biomass and waste to develop organic alternatives, which is also consistent with the AEC’s long-term goals for sustainable agriculture.

More importantly, this round of supply chain turmoil highlights the necessity of strengthening regional connectivity and emergency coordination. In the future, ASEAN could consider exploring emergency sharing mechanisms for energy and fertilizers under the “ASEAN+3” or RCEP frameworks, and promote mutual recognition standards for agricultural products and inputs to reduce trade costs. Furthermore, the development of port infrastructure and regional shipping networks will determine whether ASEAN can play a more resilient nodal role in the restructuring of global supply chains.

Conclusion: The Crisis Exposes Shortcomings, but Also Offers an Opportunity for Change

The closure of the Strait of Hormuz is a sudden external shock to ASEAN. In the short term, member states have sought to minimize the impact on people’s livelihoods through a combination of measures such as price controls, subsidies, tax exemptions, and demand restrictions. But the medium-term challenge is that rising fertilizer and energy costs could push up food prices, affect the livelihoods of millions of smallholder farmers, and spill over into the region’s food processing and manufacturing industries.ASEAN cannot rely on emergency responses forever. True resilience comes from structural reforms: advancing the transition of its energy mix toward low-carbon and localized sources, establishing regional strategic reserves of food and fertilizer, leveraging digital tools to improve logistics transparency, and deepening trade connectivity within ASEAN. This crisis may be a turning point—whether ASEAN can move from passive response to proactively building a safer and more sustainable regional supply chain system will profoundly shape the region's economic competitiveness over the next decade.