Oil shock for Asia: identifying the key pressure points in Oil & Companies News 14/03/2026 Where the pressures points are likely to emerge A key question for policymakers right now is how quickly rising oil prices will begin to strain Asian economies. Under a scenario where supply disruptions last for a month and then gradually ease throughout the year, we expect Brent crude oil to average US$83/bbl, about $15/bbl higher than the 2025 baseline. Our previous work on import exposures shows that Thailand and Korea carry the largest oil and gas trade deficits in Asia and are therefore most exposed to supply shocks and price spikes. Taiwan, the Philippines, Singapore and India follow closely, facing meaningful but more varied vulnerabilities depending on domestic buffers and pricing policies. Below, we discuss how the impact might differ across the region, shaped by each country’s energy mix, import dependencies, domestic fuel buffers and fiscal capacity to absorb subsidy costs. Asia’s fragile energy buffers Asia’s energy resilience is uneven; while Japan and Korea can absorb shocks for longer, thinner LPG buffers and heavy LNG dependence leave several economies exposed. Those with limited reserves, particularly Indonesia, could face the sharpest pressure if supply risks continue to escalate. Energy reserve adequacy varies sharply across Asia. Japan holds the deepest cushion, with reserves covering 254 days of domestic demand, followed by South Korea at 210 days. India maintains about 74 days, while the Philippines keeps close to two months’ worth of supply across refined products. While oil inventories appear broadly sufficient in the near term, LPG buffers remain notably thin, increasing vulnerability to price spikes and supply disruptions. With LNG prices up nearly 70% since the flare‑up, economies heavily reliant on imported gas – Thailand, Korea, and Japan – face outsized exposure to further volatility. At the other end of the spectrum, Indonesia’s reserves cover only about 25 days, placing it among the most at‑risk economies should disruptions persist into the second quarter. A substitution cushion: coal dependence helps India and China A key differentiator across the region is the scope of fuel substitution. India and China benefit from a built‑in shock absorber because more than half of their energy supply still comes from coal. Although both remain net coal importers, their ability to substitute oil with coal at the margin provides an important cost advantage. The contrast in recent market moves is stark: coal prices have risen only about 12% since the conflict began, compared with an approximate 70% surge in natural gas. This divergence gives India and China a meaningful substitution buffer that could reduce their exposure to oil and gas price spikes to some extent. By contrast, Korea has limited room to substitute. Its high dependency on both oil and gas leaves it exposed, even though the government has temporarily capped domestic petroleum prices. A weakening Korean won further amplifies imported inflation, prompting us to raise our 2026 CPI forecast by 0.2ppt to 2.2%, with upside risks if Brent remains above $80/bbl. If the government continues to cap retail prices without offering subsidies, refiners will have to absorb the widening cost gap, which may not be a feasible solution for the medium term. Tolerance levels: Singapore and Taiwan have the deepest fiscal cushion Asian governments are responding very differently to higher