Energy — Why Asia's Energy Crisis is Really a Crisis of Market Power

Energy · 2026-03-20

Today's developments reveal a complex interplay between geopolitical tensions and energy market disruptions, with particularly acute impacts in Asia. The potential de-escalation of the Iran conflict, signaled by Netanyahu's comments, has triggered immediate price responses in global oil markets, with WTI falling to $92.57 and Brent to $105.18. However, the broader regional impacts of the Hormuz…

OPENING While the world fixates on oil prices amid Middle East tensions, a more consequential story is unfolding across Asia's energy markets. The region's mounting fuel shortages reveal not just supply chain disruptions, but a fundamental shift in who controls critical energy flows.

The past week's developments paint a stark picture of Asia's evolving energy landscape. China's tightening grip on refined fuel exports has left import-dependent neighbors scrambling for alternatives, just as the Iran conflict threatens vital supply routes through the Strait of Hormuz. This isn't merely about temporary shortages – it's about leverage. Beijing appears to be executing a comprehensive strategy to dominate both traditional and future energy supply chains, from refined products to critical minerals for the energy transition.

Consider the parallel developments: As jet fuel shortages ripple across Asian economies, Chinese refiners are deliberately restricting exports despite ample domestic capacity. Meanwhile, Beijing is deploying massive capital to lock down critical mineral supplies globally, effectively positioning itself as the gatekeeper for both today's energy needs and tomorrow's clean technology revolution. The message is clear: Asian energy security increasingly runs through Beijing.

The vulnerability of existing energy trade routes adds another layer of complexity. India's LPG crisis following the Hormuz shutdown demonstrates how quickly regional energy systems can be destabilized. But more importantly, it highlights how the geography of energy dependency is shifting. While Middle Eastern crude still matters enormously, the real power increasingly lies with those who control the processing and distribution of refined products and critical minerals.

The implications extend far beyond immediate market disruptions. As traditional energy powers grapple with geopolitical upheaval – evidenced by this week's volatility following attacks on Iranian and Qatari energy facilities – new forms of energy influence are taking shape. The ability to process fuels, control critical mineral supply chains, and leverage export policies is becoming as strategically valuable as owning the underlying resources.

WHAT TO WATCH Energy professionals should closely monitor China's downstream fuel export policies and overseas mineral investments as leading indicators of regional power dynamics. While headlines about Middle East conflicts and oil prices will continue to drive short-term market sentiment, the real story of energy security is being written in the fine print of trade flows and industrial policy. The next month could reveal whether other Asian powers begin to push back against this emerging order or accept a new reality of increased dependency on Chinese energy infrastructure.