Southeast Asian leaders adopted a contingency plan Friday in Cebu, Philippines, aimed at mitigating the economic impact of the Iran war through coordinated fuel reserves and diversified energy sources, though implementation of the ambitious regional infrastructure projects faces significant practical and financial hurdles.
The Philippines, among the worst affected by fuel price spikes caused by the Iran war, hosted the group's annual summit on the central island province of Cebu. President Ferdinand Marcos Jr. ordered the summit stripped of the traditional pomp and pageantry in keeping with the economic headwinds worldwide, signaling the gravity of the energy crisis facing the region.
The Contingency Plan
ASEAN's contingency plan calls for actions including the ratification possibly this year of an agreement that will pave the way for coordinated emergency fuel sharing, planning a regional power grid and fuel stockpile, and diversifying the region's sources of crude oil. Promoting the use of electric vehicles and studying the use of new technologies, including civilian nuclear energy, were also part of the crisis plan.
The contingency steps will be implemented immediately, but the establishment of a regional fuel stockpile and power grid is a complex matter and may take a long time, Marcos said. He asked, "Let's talk about the fuel reserve. Is it going to be in one single place? Is it going to be scattered through the whole of ASEAN?" A regional power grid that allows countries to trade electricity has been considered for years but has only been realized "at a fairly small level," Marcos said, adding that the leaders were unfazed.
"They are committed to making this succeed because everyone is suffering and everyone wants to get out of this situation," he said.
Evacuation Challenges
A key dilemma for the ASEAN leaders was how to carry out large-scale evacuations from the Middle East, where more than a million of their citizens work and live, if widespread hostilities flared up again. Several Southeast Asian citizens have been killed since the United States and Israel launched military strikes on Feb. 28 against Iran. The hostilities have continued sporadically despite a month-old ceasefire, especially in the strategic Strait of Hormuz.
A joint declaration issued by the leaders called on the regional bloc's 11 state members to share information and strengthen coordination with international organizations "to ensure the safety and welfare of ASEAN nationals in affected areas."
Long-Term Economic Impact
Marcos told fellow leaders during their summit that the Iran war exposed the weaknesses of Southeast Asian nations to external shocks and warned that recovery could take years even if the war ends now. "Even if the tensions de-escalate in time, the damage to critical infrastructure, to vital systems and trust in general will continue to be felt for years to come," Marcos said.
Known for their conservative and careful rhetoric, top delegates to the ASEAN summit avoided blunt expressions of their disappointment over the continuing hostilities. Thailand's Foreign Minister Sihasak Phuangketkeow was more emphatic, calling for the current ceasefire between the U.S. and Iran to be extended and assurances for the safe passage of ships through the Strait of Hormuz.
"This war should not have occurred in the first place," Sihasak told AP in a brief interview and added that all ASEAN states were alarmed. "We don't know what the objectives are right?"
Southeast Asia will remain "in this limbo situation" until the Iran war ends, Marcos said. "Until the fighting ends, until the bombing ends, then it is very difficult to put together any kind of solution," he said.
Despite the focus on the Middle East, the leaders took up major regional flash points, including the South China Sea territorial disputes involving Beijing, a five-year civil war in Myanmar and a recent border conflict between Thailand and Cambodia. Aside from the Philippines, ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam. East Timor was accepted as a full member about 1 year ago.
Why This Matters:
The Iran war's disruption of global energy markets underscores the vulnerability of Southeast Asian economies to external shocks beyond their control, particularly their dependence on Middle Eastern oil supplies flowing through the Strait of Hormuz. The fuel price spikes affecting the Philippines and neighboring countries demonstrate how geopolitical instability directly translates into economic hardship for citizens and businesses. While ASEAN's coordinated response represents a pragmatic approach to energy security through market diversification and emergency preparedness, the practical challenges acknowledged by President Marcos—including the complexity of establishing regional fuel reserves and power grids—highlight the difficulty of implementing large-scale government infrastructure projects. The presence of more than a million Southeast Asian workers in the Middle East adds a human security dimension that requires careful diplomatic navigation. The region's ability to recover from these economic headwinds will depend largely on how quickly market stability returns and whether private sector innovation in alternative energy can reduce dependence on volatile Middle Eastern supplies.