Asia is beginning to feel the full economic and social consequences of the war launched on February 28 by Donald Trump against Iran. The continent, which accounts for roughly 90 per cent of Liquefied Natural Gas (LNG) imports from the Middle East, is now grappling with severe supply disruptions. With shipments curtailed and uncertainty looming, analysts warn that normalcy may not return before 2028, when new gas production—primarily from the United States—is expected to ease global supply constraints.
The impact is being felt across Asia’s largest and fastest-growing economies, including China, Japan, South Korea, India, and Pakistan, as well as emerging markets such as Vietnam and Thailand. These countries depend heavily on LNG for electricity generation and industrial activity. The sudden disruption threatens not only power supply but also industrial output and agricultural productivity, raising questions about the long-term reliability of LNG as a cornerstone of Asia’s energy mix.
The burden of this crisis is likely to fall disproportionately on the poorest segments of society. Rising energy costs and supply shortages translate directly into higher living expenses, reduced access to basic services, and disruptions to livelihoods. Critics argue that such consequences were not adequately considered when the decision to escalate military action was made.
Early signs of strain are already visible. Several countries are turning to alternative energy sources, particularly coal and oil, to bridge the gap. According to analysis by Wood Mackenzie, South Korea could offset its LNG shortfall by ramping up coal-fired power generation, while Japan may replace up to 70 per cent of its gas-based electricity with coal. While effective in the short term, this shift carries significant environmental costs.
The renewed reliance on coal threatens to derail global decarbonisation efforts. Coal emits roughly twice as much carbon dioxide as natural gas, making it a far less sustainable option. India, another major importer of Middle Eastern LNG, has already moved to maximise coal-based power generation. Authorities in New Delhi have directed plants to operate at full capacity for several months, marking a notable reversal of earlier commitments to reduce carbon emissions.
A similar trend is unfolding in China, which, despite having access to pipeline gas from Russia, is also increasing its reliance on domestic coal reserves. At the same time, countries like Pakistan are attempting to cushion the impact by expanding renewable energy capacity. The country’s growing investment in solar power—supported by affordable imports from China—has drawn international attention, including from publications such as The Economist.
Despite these mitigation efforts, shortages are already affecting daily life. In both India and Pakistan, limited LNG availability has disrupted household cooking fuel supplies and forced many small businesses, including restaurants, to scale down or shut operations. This underscores the human cost of what might otherwise appear to be a purely geopolitical or economic crisis.
Energy analysts warn that the situation could worsen in the coming weeks. Henning Gloystein of Eurasia Group has described the market as entering a period of significant tightening, with the real physical impact of supply shortfalls only beginning to materialise. Similarly, Daniel Toleman of Wood Mackenzie notes that reduced supply will inevitably force demand adjustments, primarily through fuel switching and consumption cuts.
The underlying economics of LNG investment are also shifting. Long-term plans for gas-fired power projects are now under review, as uncertainty over supply and pricing undermines confidence in the sector. Even if the conflict were to end soon, experts caution that a return to pre-war stability is unlikely.
Meanwhile, diplomatic efforts to de-escalate the crisis continue. Pakistan has taken an active role, hosting discussions among regional Muslim-majority states to explore pathways toward peace. These efforts aim to encourage dialogue between the United States and Iran, particularly after extensive military strikes—reportedly carried out by the US in coordination with Israel—caused widespread damage within Iran.
Despite the intensity of these attacks, Iran has demonstrated its capacity to respond. Reports indicate that on April 3, Iranian forces managed to shoot down two American fighter aircraft, highlighting the risk of further escalation. Such developments reinforce the urgency of diplomatic intervention.
The stakes extend far beyond the immediate conflict zone. The disruption of energy flows through critical chokepoints such as the Strait of Hormuz threatens global energy markets and economic stability. For Asia, however, the consequences are already tangible—manifesting in energy insecurity, economic strain, and growing hardship for millions.
Unless a sustainable diplomatic solution is reached, the region—and indeed the world—may have to brace for a prolonged period of volatility, with far-reaching implications for both economic development and environmental sustainability.
Shafaqna Pakistan
pakistan.shafaqna.com
Note: Shafaqna do not endorse the views expressed in the article
