Southeast Asian nations that rely on liquefied natural gas (LNG) for fuel face potential risks from geopolitical conflicts in the Middle East, an international research group said Wednesday.
A new report by Zero Carbon Analytics (ZCA) says these conflicts could significantly impact LNG supply at a time when Southeast Asia plans to import more of the fuel to strengthen energy security and address tariff pressures from the United States.
“The unpredictable nature of the conflicts in the Middle East has the potential to disrupt LNG flows, placing Southeast Asian countries at heightened risk of supply shortages and surging costs,” said Dario Kenner, an energy transition researcher at ZCA.
ZCA, a research group providing insights and analysis about climate change and the energy transition, said geopolitical disputes could raise affordability issues despite an impending surge in global LNG supply.
These concerns are intensified by the Israel-Iran conflict, where analysts warn that any disruption to the Strait of Hormuz could severely affect Southeast Asia, potentially making LNG unaffordable or inaccessible for some regional buyers, ZCA said.
“The region’s investments in LNG infrastructure come with exposure to continued price volatility, dollar-denominated costs, and potential supply constraints,” Kenner said.
ZCA estimates Southeast Asia’s LNG import infrastructure investments will cost $11.8 billion, which could lock the region into decades of fuel shocks and price instability due to global market volatility and political disruptions.
“By contrast, ASEAN countries have substantial untapped renewable energy potential, and the region’s existing clean energy manufacturing capacity and grid interconnection initiatives offer alternative pathways to strengthening long-term energy independence and resilience,” Kenner said.
ZCA said Southeast Asia’s increased demand for LNG as an energy security solution is partly driven by projected growth in global LNG supplies, as the United States and Qatar expand their export infrastructure.
CA cited International Energy Agency data showing cumulative liquefaction export capacity growing 33% between 2024 and 2028, from 665 billion cubic meters per year to 884 billion cubic meters per year.
Thailand, the region’s most established LNG importer, plans to add up to 2 million metric tons of U.S. LNG over the next five years. Emerging LNG import leaders Vietnam and the Philippines plan to build terminals with capacity to import between 19.2 million and 30.2 million metric tons of LNG per year.
Even net-exporters Indonesia and Malaysia are expected to increase U.S. LNG imports as part of tariff negotiations, ZCA said.
