NextFin News - The closure of the Strait of Hormuz has forced a radical realignment of the global energy trade, as Southeast Asian nations scramble to secure Russian crude oil following a month of conflict involving the U.S., Israel, and Iran. With roughly 20% of the world’s oil supply effectively choked off, the Philippines, Vietnam, and Indonesia are now competing with China and India for a dwindling pool of Russian shipments that were once considered politically toxic but are now essential for national survival.
U.S. President Trump has responded to the mounting crisis by temporarily easing sanctions on Russian oil shipments already at sea, a pragmatic pivot aimed at preventing a total economic collapse in allied Asian capitals. The waiver, initially granted to India, was extended to the rest of the world this week as energy emergencies began to ripple through the region. In Manila, where gas station lines now stretch for blocks and airlines are weighing fuel rationing, the government imported Russian crude this month for the first time in five years, just days after declaring a national energy emergency.
The shift highlights a desperate search for "short-term" energy security that overrides long-standing geopolitical alignments. Before the outbreak of hostilities on February 28, the Philippines relied on the Middle East for nearly 97% of its seaborne oil imports. According to Muyu Xu, a senior crude oil analyst at Kpler, the opportunity for these nations is "short-lived and shrinking." Xu, who has long tracked global oil flows with a focus on Asian demand, noted that the real constraint is no longer political will but physical availability. Russia is already exporting at levels close to its previous peak, and recent drone attacks on its own energy facilities by Ukraine have further hampered its ability to ramp up production.
While Russia is reaping billions in windfall revenue from the surge in demand, the relief for Asian buyers may be fleeting. Kpler data indicates that approximately 126 million barrels of Russian oil remain at sea, but India and China have already snapped up the majority of these cargoes. India’s imports of Russian crude jumped to 1.9 million barrels a day in March, up from 1 million before the Iran conflict. However, even this surge fails to offset the 2.6 million barrels per day India previously sourced from the Middle East. Duttatreya Das, an analyst at the think tank Ember, warned that short-term buys cover only a few days of supply, leaving a gap that is increasingly difficult to fill as emergency stockpiles dwindle.
The economic toll is already visible in Thailand and Vietnam. Thai fuel prices surged on March 26 after the government was forced to lift subsidies, with diesel prices jumping 18%. In Vietnam, Prime Minister Pham Minh Chinh’s recent visit to Moscow resulted in new agreements on oil, gas, and nuclear cooperation as rising energy costs began to squeeze the country’s vital manufacturing sector. For these nations, the alternative—sourcing oil from the U.S., South America, or West Africa—is a logistical impossibility in the short term, as those shipments would take months to arrive.
A more cautious perspective suggests that the current rush to Russia may be a temporary fever rather than a permanent shift. Jitsai Santaputra of The Lantau Group noted that while Thailand is weighing its options, it has not yet reached the level of desperation seen in the Philippines. Furthermore, China’s massive onshore crude inventory of 1.2 billion barrels—enough to cover four months of imports—provides a significant cushion that other regional players lack. This disparity suggests that while the region is united in its thirst for oil, the ability to weather a prolonged shutdown of the Strait of Hormuz varies wildly between the "haves" and "have-nots" of energy storage.
The crisis has effectively turned Russia into the lender of last resort for Asian energy security. Sam Reynolds of the Institute for Energy Economics and Financial Analysis observed that Russia has emerged as a major winner, as the speed of delivery and temporarily lower prices provide an irresistible incentive for desperate importers. As the U.S. sanction waiver approaches its April expiration, the focus in Asian capitals has shifted entirely to whether the Trump administration will prioritize global price stability over the continued isolation of Moscow. For now, the moral dilemmas of the Ukraine war have been sidelined by the immediate necessity of keeping the lights on.
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