Tuesday, oil prices rebounded, accelerating their recovery with a rise of more than 5%.

Currently, the Middle East conflict has entered its third week, and oil prices have remained at high levels, while shipping through the Strait of Hormuz remains paralyzed, and the prospect of resuming navigation is "far off", further increasing market uncertainty.

The current dilemma is forcing many countries into an energy "emergency allocation" state, where governments are choosing between reducing demand or bearing costs.

At the same time, priority is given to allocating increasingly tight energy supplies. But how long can these measures last? And to what extent will they be effective?

Globally, Asia has been hit the hardest, as the region is highly dependent on imported fuel, with a large portion of energy transport passing through the Strait of Hormuz. According to data from the U.S. Energy Information Administration, over 80% of liquefied natural gas passing through the Strait of Hormuz in 2024 is heading to Asia, with most going to Japan, South Korea, and Taiwan. Asian governments are responding urgently, such as inventorying oil reserves, conserving energy, competing for supply, and implementing government intervention measures to try to suppress prices.

Faced with this oil crisis, many countries' first choice is to release strategic oil reserves, but will this really solve the problem?

Take Japan, for example. Japan's first line of defense is its vast strategic oil reserve, which can sustain supply for about 254 days. This system was established after the Arab oil crisis of the 1970s. Japan began releasing about 45 days of oil reserves this week to prevent oil price surges amid reduced crude oil imports. The last time it released reserves was after Russia's invasion of Ukraine in 2022. This measure will help maintain the operation of Japan's energy-intensive industries, including automotive, steel manufacturing, and heavy machinery. Companies like Toyota, Mitsubishi, and Nippon Steel rely on stable fuel supplies.

However, analysts point out that using reserves is not a long-term solution. Analysts say that this will provide a "buffer" for refineries, but unless the released oil can be purchased from other countries, it will not increase overall supply. If the crisis continues, crude oil shortages may return. Reserve releases might keep refineries running for a few weeks, but if crude oil supply continues to be cut off, companies may have to reduce production.

Researchers from Japan's Renewable Energy Institute also stated that this action cannot fundamentally solve the problem. Renewable energy is the long-term solution, but the Japanese government is not proactive in this regard. However, analysts said that Japanese Prime Minister Takahashi Harumi will meet with U.S. President Trump later this month, and Japan plans to increase purchases of U.S. liquefied natural gas and restart nuclear power plants, which may become a focus of discussion.

Despite some countries releasing reserves, oil prices are still rising. Southeast Asian countries are urging households, businesses, and government agencies to reduce electricity use to extend limited energy reserves and provide appropriate subsidies, but these measures are merely short-term fixes.

In the Philippines, the government implemented a four-day workweek to reduce fuel consumption and lower government energy usage by one-fifth. Offices were required to turn off computers during lunch breaks and set air conditioning temperatures no lower than 24 degrees Celsius. On Tuesday, hundreds of tricycle drivers queued up to receive subsidies. The government also announced that it would increase fares for various forms of public transportation nationwide. However, these price hikes do not apply to the tens of thousands of tricycle drivers. They drive small motorcycles, the only vehicles that can navigate narrow alleys.

A tricycle driver told AFP, "Fuel prices have gone up again today, but my fare hasn't changed," because passengers can't afford higher fees. This driver usually earns about 1,000 pesos (about 15 euros) a day, but has seen his income cut in half over the past few weeks. He is skeptical about the government's subsidy, believing that the 5,000 peso subsidy he just received won't last a week. The Philippine Senate is expected to vote on Tuesday to grant President Marcos temporary power to suspend or reduce petroleum consumption taxes. The Philippines almost completely relies on crude oil from the Middle East, so it is now considering purchasing oil from Russia.

Other countries have also taken similar measures. Vietnam encourages remote work, and Thailand's prime minister urges officials to take the stairs instead of elevators.

At the same time, countries in the region are competing for limited supplies at higher prices. Vietnam has asked refineries and fuel distributors to maintain adequate supplies, while Thailand has extended its two-month oil reserve usage period and is seeking other domestic energy sources. Both countries are using price subsidies to buffer residents' living costs. Thailand's export ban to protect limited reserves has led to nearly one-third of the 6,000 gas stations in Cambodia being forced to close.

Additionally, governments are caught between suppressing energy prices and ensuring economic stability. Because saving electricity could suppress commercial activity, while prioritizing household gas could affect the catering industry, among others.

For example, India is prioritizing liquid petroleum gas (LPG) for household use. India's oil minister said that the government absorbed more than half of the price increases caused by global market volatility through a federal subsidy program to maintain low prices for poor families. However, as the world's second-largest LPG importer, India's restaurants and hotels have already started to feel the pressure of shortages, with some restaurants shortening operating hours, temporarily closing, or reducing dishes that require long cooking times or frying. Due to the massive scale of demand, India can maintain price controls for a limited time. An analyst from a think tank said that if subsidies stop, the situation could deteriorate within a week and pointed out that natural gas supply is the most urgent issue, with fertilizer plants and small industries being the first to suffer.

An analyst from a Vietnamese consulting company said, "Even relatively mild energy use restrictions may hinder industrial activities." She pointed out that Vietnam's export industry is energy-intensive, and increasing fuel costs or implementing energy-saving measures could quickly raise production costs or reduce factory output. Analysts warned that this difficult choice may soon spread from Asia to African economies that depend on fuel imports, with countries competing for limited supplies.

In the long term, clean energy strategies remain important, but the current crisis is forcing many countries to abandon this strategy. For example, South Korea announced on Monday, March 17, that it would cancel the previous 80% limit on coal-fired power generation capacity and increase the utilization rate of nuclear power to near the same level. This crisis has even forced many countries to deepen their reliance on fossil fuels.

At present, despite efforts by multiple governments to mitigate the impact of this oil crisis, in the long run, there are almost no truly effective solutions. The blockade of the Strait of Hormuz will inevitably bring profound impacts on the global economy.

Source: rfi

Original: toutiao.com/article/7618214948082090537/

Statement: This article represents the views of the author alone.