Asia’s energy reserves under pressure as ‘2026 energy shock’ takes hold

The closure of the Strait of Hormuz has thrown a harsh spotlight on a simple but decisive question for Asian governments: how long their energy reserves can last.

Oil prices have already surged past $100 a barrel on the back of the ongoing Iran war, and the next phase of the crisis may hinge less on production and more on storage. Because of this, for traders and policymakers alike, the size of strategic and commercial stockpiles around Asia is becoming the key variable shaping market expectations.

The disruption is significant because roughly three-quarters of Middle Eastern crude exports to major East Asian economies transit through the narrow Gulf chokepoint. However, with shipping now effectively halted, the region’s energy security is being measured in days of supply left in the tanks rather than barrels traded.

Yet Asia is far from uniform as was highlighted in a recent piece by the Atlantic Council. While some economies have months of cushion, others are down to their last few weeks, or even days.

Japan currently holds the region’s deepest buffer, with around 254 days of supply according to government sources in Tokyo. The Merchant's News adds that South Korea follows with roughly 208 days, while China has around 200 days. These figures reflect a combination of long-term filling of petroleum reserves and commercial inventories built up over years of supply security planning. Taiwan comes in with between 100 and 146 days depending on source.

Further down the table, India has roughly 74 days of cover, Thailand around 61 days, and the Philippines close to 60 days.

The picture becomes even more fragile across other parts of Southeast Asia. Indonesia is estimated to have just 20 days or so of supply according to Atlantic Council while Vietnam has roughly 15 days. Cambodia meanwhile has no meaningful stockpile data available.

The disparity matters because countries with thinner reserves face a far more immediate scramble for supplies if the disruption persists as it is now expected according to hints emerging from Washington that we could be looking at another two to three weeks of military action at the very least.

Adding to the problems is the fact that Gulf producers themselves appear to have far less cushion, with some holding between one and four weeks of inventory. Subsequent signs of production shutdowns are now emerging daily across the region in a development that has further unsettled global markets.

The 2026 energy shock arrives at a moment when the world’s largest oil importer, China, sits in a comparatively stronger position than many of its regional rivals. While Beijing remains heavily dependent on imported crude, it also maintains a degree of domestic production and has been steadily building stockpiles – so much so that for the past year, Chinese imports of US crude have plummeted to just 81.9mn barrels – around 38,350 barrels per day (bpd) – 84% down from levels coming in a year prior.

At present, China’s onshore crude inventories are estimated at roughly 1.2bn barrels as of January 2026. With refinery runs averaging about 15.5mn bpd and domestic production of around 4.3m barrels per day, those reserves translate into roughly 108 days of import cover. If exports of refined petroleum products were halted to prioritise domestic demand, supply could stretch to around 130 days, Atlantic Council adds.

China may also have access to an additional 38mn barrels of Iranian crude stored on tankers in Malaysian or Chinese waters, although the availability of those volumes remains uncertain as much of it was placed there under shadow-fleet operations while Iran was still exporting.

The region’s vulnerability extends beyond oil. Liquefied natural gas (LNG) markets are also under strain, particularly after drone strikes targeted facilities at Qatar’s Ras Laffan complex. This site alone accounts for roughly 20% of global LNG exports.

Natural gas prices in Europe have already surged more than 50% and are expected to climb further, reflecting growing fears that supply disruptions will continue to ripple through global energy markets and fuel a fresh inflationary shock.

The impact of an LNG crisis is already varying widely across Asia. China relies less heavily on imported LNG than many of its regional competitors and benefits from substantial domestic production, alongside pipeline imports from Russia, Central Asia and Myanmar. Such are the stockpiles in place and other sources for LNG put in place, China has not taken in any US LNG for over a year – since February 2025. Coal and renewable power also provide alternative sources of electricity.

By contrast, economies such as Japan, South Korea and Taiwan depend far more heavily on imported LNG to meet their gas demand, leaving them more exposed to sustained disruptions in Gulf supply.

Energy intensity also plays a role. China’s economy requires fewer barrels of oil to generate the equivalent of $1,000 of gross domestic product than some regional peers as Atlantic Council points out, particularly South Korea and Taiwan, where industrial output consumes larger volumes of fuel.

That combination of domestic production, stockpiles and diversified energy sources leaves Beijing relatively better positioned to weather a prolonged supply shock.

Even so, the broader lesson for the region is stark. Energy security is increasingly becoming a geopolitical question rather than just an economic one. The current disruption coming as part of the 2026 energy shock demonstrates how quickly a maritime choke-point can reshape supply chains, commodity prices and political leverage.