Asia’s Energy Shock: Vulnerabilities and Resilience

In this paper, we discuss:

• The Hormuz disruption as a systemic energy shock hitting Asia disproportionately due to its dependence on Middle Eastern energy;
• Diverging country impacts, with China showing structural resilience while Japan and South Korea face acute vulnerabilities;
• The macroeconomic effects, including higher inflation, weaker currencies, and rising production costs;
• Policy responses combining short-term stabilisation with long-term diversification and energy transition strategies;
• The acceleration of electrification and renewables, reinforcing China’s position as a leading “electrostate.”

Download PDF: Asia Energy Shock – May 2026