MANILA, July 20 — For the ten economies of Southeast Asia, a hypothetical closure of the Strait of Hormuz is not an abstract maritime scenario. It is a direct threat to the region’s manufacturing backbone, its trade lifelines, and the cost of almost everything families buy. A straight-line calculation shows why.
ASEAN imported roughly $150 billion worth of oil in 2022, when benchmark prices averaged $90 a barrel. A $20-per-barrel spike, typical in a Hormuz crisis, would add $30 billion to the collective annual import tab.
That is extra cost that must be absorbed by businesses or passed on to consumers — and with inflation already a concern in several member states, the human side of that arithmetic matters.
Why the Strait Matters to Southeast Asia
The strait carries about 20% of the world’s oil and one-third of its liquefied natural gas trade. For a region that relies on seaborne energy and exports manufactured goods, the supply chain would seize up almost immediately. Plastics, chemicals, and transportation — the basic ingredients of modern economies — depend on affordable crude and gas feedstocks.
Disrupt the flow and you disrupt factory floors from Jakarta to Ho Chi Minh City. In 2022, ASEAN’s combined gross domestic product stood at $3.6 trillion, a figure built on trade and manufacturing.
The Asian Development Bank has modelled what a 50% reduction in Hormuz traffic would mean: a hit to regional GDP of 0.5 to 1.0 percent in the first year. That is billions of dollars in lost output, and behind that statistic are real workers and real businesses.
Singapore’s Refining Hub at Risk
Singapore, with a 2022 GDP of $466 billion, is home to one of the world’s largest oil refining complexes — 1.5 million barrels of capacity every day. If crude inputs are disrupted, refining margins get squeezed. The city-state’s economy, already highly exposed to global trade flows, would feel the pinch quickly.
For the families whose livelihoods depend on the petrochemical and logistics sectors, the uncertainty is real. Thailand presents a different vulnerability.
The country imported about 800,000 barrels of oil per day in 2022, yet holds only 60 days of strategic reserves. That cushion shrinks fast when supply lines are severed. Without a collective emergency-sharing agreement among ASEAN members, each country is left to manage its own stockpile in isolation.
Inflation and the Philippines
The Philippines, a net oil importer, saw headline inflation at 5.8% in 2022 — a level partly driven by energy costs. A sustained oil spike from a Hormuz closure could push inflation above 7%, according to the data behind the analysis. That means higher transport fares, more expensive food, and tighter household budgets.
For all ten nations, the lack of a regional strategic petroleum reserve amplifies the danger. The Manila talks now underway are expected to urge exactly that: the creation of a joint emergency stockpile and a serious push toward diversifying energy sources.
Those steps, long discussed but never fully implemented, could be the difference between a manageable shock and a crippling one. The clock is not ticking on a crisis that has already happened. But the hypothetical is built on real numbers, real import bills, and real exposure.
Southeast Asia’s economy has grown rapidly on the back of open trade and stable energy. A Hormuz closure would test every assumption behind that success.
