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Desperate for fuel, US allies in Asia are turning to its adversaries instead
The US has negotiated a fragile ceasefire that could reopen the Strait of Hormuz, but Asian allies that depend on the waterway are already being forced to rely on others for energy security– to the benefit of America’s top adversaries.
After the initial airstrikes by the US and Israel in February, Iran effectively closed the Strait of Hormuz, through which one-fifth of the world’s oil flows.
Allies in Europe and Asia were not informed in advance of the war or asked to take part from the outset. Nonetheless as the price of crude oil surged, US President Donald Trump lambasted other nations for not sending military support and said those that need it should “take the lead” and “go get your own oil.”
They now seem to be heeding his words, particularly in the Asia-Pacific, whose economies suddenly lost their biggest source of energy imports and have been hit first by the historic global oil crisis.
US allies Japan, Thailand, South Korea and the Philippines have looked to broker deals with Iran to ensure the safe delivery of oil and natural gas. Asian countries are also buying up more natural resources from US rival Russia, while China has signaled its willingness to help alleviate fuel shortages and deepen energy collaboration with nearby economies such as Australia, the Philippines, and even Taiwan.
On Tuesday, Trump announced a two-week ceasefire under the condition that the Strait of Hormuz be reopened, providing a reprieve from climbing crude prices. However, the material impact of the agreement remained unclear.
While the US touted its success in reopening the strait, Iran said the country’s military would continue to coordinate the passage of vessels during the ceasefire, and warned that the war was not over. Since the ceasefire announcement, only a trickle of tankers have passed through the narrow passage which, before the war began, was a free and open international waterway.
Regardless of the ultimate outcome of peace talks, Trump’s decision to go to war has reshuffled energy trade and partnerships in the region, with long-term implications for the US and the nature of its alliances in Asia.
“The crisis has exposed a hard truth about US power,” said Roc Shi, a professor at the University of Technology Sydney whose research focuses on energy issues in Asia and Australia. “Despite decades of security guarantees, the US was unable to prevent the closure of the world’s most critical energy chokepoint. Asian allies are now quietly asking whether the US security umbrella extends to energy supply routes.”
Shi said governments in Asia will prioritize diversifying their energy sources, which includes purchasing more oil and natural gas from both the US, the world’s largest producer on both counts, as well as its rivals.
“The crisis is simultaneously strengthening and straining the US‑Asia alliance,” said Shi. “Allies will now hedge – buying more from America, but also building their own resilience.”
Challenged allies
The war in Iran has had a particularly pronounced effect in Asia, where countries have been trying to conserve energy while rushing to secure more supplies. But the differing responses highlight a broad range of vulnerability among Asian nations, researchers said, prompting those most exposed to the oil crisis to seek their own solutions, even at the risk of alienating the US.
The Philippines was the first country to declare a state of national energy emergency. It is now buying Russian oil for the first time in five years, has negotiated with Iran to assure safe transport of its own vessels through the strait and resumed diplomatic talks with China over energy cooperation, despite the two sides’ heated territorial disputes in the South China Sea.
Japan, which holds one of the world’s largest strategic petroleum reserves, released a historic amount of emergency stockpiles last month to cushion the blow of higher oil prices. However, Prime Minister Sanae Takaichi said this week that she was working to arrange talks with Iran’s president, while Japan’s public broadcaster NHK reported that a handful of Japan-linked ships have recently passed through the Strait of Hormuz.
South Korea, another US ally, said Friday it would send a special envoy to Iran to discuss the safe passage of its vessels through the Strait of Hormuz. It has already sent envoys to Kazakhstan, Oman and Saudi Arabia to secure supplies of crude oil and naphtha, a petroleum byproduct needed for producing petrochemicals like plastic and gasoline. The country has also taken advantage of a temporary waiver on US sanctions to buy naphtha from Russia for the first time in four years.
“The approach of each country will represent a combination of leverage, capability, and urgency,” said Robert Walker, an economist with the Indo-Pacific Development Centre at the Sydney-based Lowy Institute. China, which could quickly liaise with Iran, was one of the first to see its own cargo safely through the strait. “Diplomatic capability and access matters in a crisis,” Walker added.
John Coyne, director of the National Security Program at the Australian Strategic Policy Institute, said that while the energy crisis will likely spur greater regional collaboration, it could also strain US bilateral relationships.
“The struggle point will be how the US responds if there’s a move to take more Russian oil, or those negotiations of what countries are allowed to take crude oil from the strait and from Iran,” Coyne said. “There’s a number of unknowns here. Will Iran be happy for that crude oil to be refined and sent to, say, Australia? And how will the Americans respond to that?”
The pressure on American allies is not limited to Asia. France and Italy are also negotiating directly with Iran to allow their ships through the Strait of Hormuz. Meanwhile, Iran has launched airstrikes against US Gulf allies including Saudi Arabia, the UAE, Kuwait, Qatar and Bahrain in retaliation, targeting US military bases and energy infrastructure.
Material advantage
For Russia and Iran, major economies’ desperate search for fuel has resulted in an inadvertent windfall.
Those oil industries had been sanctioned by the US in an attempt to stymie military and nuclear development. But as gas prices rose at home, the Trump administration waived sanctions through mid-April on products that were already loaded onto vessels.
That decision could have brought Russia between $3.3 billion and $5 billion in additional oil revenue in March, according to a post by Roxanna Vigil, an international affairs fellow in national security for the Council on Foreign Relations.
A separate analysis by Louis-Vincent Gave, founding partner at the research firm Gavekal, said that Iran had gone from exporting about 1 million barrels per day for $40 to $45 a barrel before the war, to about 1.7 million barrels for over $100 a barrel. If Iran is charging ships $2 million to pass through the strait as some reports suggest, that could bring in another $60 million per week, Gave noted.
“The White House is caught in a trap of its own making if the April expiration dates arrive without lower oil prices,” Vigil wrote. “The Trump administration will soon face a difficult choice that will now be scrutinized by both sides of the aisle: double down by renewing the waivers that benefit US adversaries or reimpose sanctions on a market the United States helped destabilize.”
Another country that could indirectly benefit from the oil supply shock is China.
With inroads among major oil producers, large crude stockpiles and an extensive renewable energy sector, China is better positioned to weather the energy crisis than its Asian neighbors. That has afforded the country more geopolitical leverage at a time when the US is actively looking to counter its influence in the region.
In order to protect its domestic industries, China has imposed controls on fuel exports but said it would work with Southeast Asian nations to address energy shortages. China also offered energy security to Taiwan, which it claims as part of its territory, if the island democracy agreed to peaceful unification. And on Tuesday, Chinese Premier Li Qiang discussed deepening cooperation on clean energy and electric vehicles in a phone call with Australian Prime Minister Anthony Albanese.
“China has the reserves and the overland pipelines to be Asia’s energy anchor,” said Shi from the University of Technology Sydney. “So far, it has not articulated its plan. If it does properly, the region’s geopolitical map will shift with it.”
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