Overview | Middle East conflict impacts developing countries, potentially accelerating energy transition efforts

(Source: Shanghai Observer News)

The Philippines announced a national state of energy emergency, people in various parts of India queued to buy gas cylinders, a large number of vehicles at Bangkok Suvarnabhumi Airport in Thailand suspended operations, energy prices in Chile surged significantly, and fuel station operators in Ethiopia are “stockpiling” fuel… Recently, the energy crisis triggered by Middle East conflicts has posed severe livelihood challenges for many developing countries, increasing economic development risks, and also prompting many nations to consider accelerating energy transition and promoting green transformation processes.

Livelihood Difficulties: Severe Challenges Looming

At the end of March, the Philippines declared a state of energy emergency nationwide. Due to rising fuel prices, Cebu Pacific and Philippine Airlines announced the suspension of some flights, and several large supermarkets shortened operating hours to reduce energy consumption.

In Mumbai, India, starting from early March, about one-fifth of hotels and restaurants were fully or partially closed. Long queues for gas cylinders appeared across the country. India’s energy sector stated that the supply of cooking fuel for over 333 million Indian households is threatened, forcing the government to implement rationing and conservation measures.

At Bangkok Suvarnabhumi Airport in Thailand, taxi services were impacted by fuel shortages, with many vehicles suspending operations, especially affecting long-distance travel. Thai domestic airlines raised ticket prices in an attempt to offset the rising fuel costs.

In Laos, the government stabilized fuel prices by reducing fuel consumption taxes and providing subsidies; encouraged the use of electric vehicles, lowered import tariffs on electric vehicles, reduced electric vehicle service fees by 30%, and increased costs related to fuel vehicles by 30%; and reduced school weekly classes from five days to three.

In Chile, fuel prices recently surged sharply, with gasoline increasing by about 30%, diesel by 50% to 60%, with higher increases in remote and island areas, directly raising costs for residents’ travel, heating, and logistics.

In Africa, fuel prices in countries like Ethiopia soared. Libyan President Mami called on the national oil company to stop signing new agreements related to oil fields in production.

Economic Risks: Multi-layered Damage or Potential Social Unrest

International observers believe that the energy crisis caused by Middle East conflicts is severely impacting the economic pillars of developing countries, pushing up inflation expectations, threatening food security, worsening fiscal conditions, and risking turbulence in financial markets.

Recent statistics from Thailand’s Ministry of Tourism and Sports show that from January 1 to March 11, 2026, Thailand’s tourist arrivals decreased by 4.4% compared to the same period in 2025. The Thai Chamber of Commerce University predicts that if the Middle East conflict continues for three months, Thailand could suffer losses of about 20 billion Thai Baht (approximately $614 million).

The Chilean government stated that worsening fiscal conditions have squeezed policy flexibility. Under high international oil prices, the government faces a dilemma between “stabilizing prices” and “maintaining fiscal stability.” Francisco Castañeda, an economist at the Central University of Chile, told Xinhua that the recent price hikes “are causing problems across all production chains in Chile, especially in mining, construction, and agriculture—industries dependent on energy inputs,” warning that “ultimately, higher costs will be borne by enterprises.”

Rwandan economic analyst Stratton Habyalimana said, “If the energy crisis persists, imported inflation pressures, along with soaring transportation and food prices, will affect the entire African region.”

Affected by rising energy prices, Goldman Sachs recently lowered India’s 2026 economic growth forecast to 5.9%, warning that this year India will face slowing growth, rising inflation, and currency depreciation pressures.

Parul Bakhshi, a researcher at the Middle East branch of the India Think Tank Observers Foundation, wrote that the blockage of the Strait of Hormuz has a particularly significant impact on India’s economy. Experts believe that India’s liquefied petroleum gas (LPG), mainly used for domestic consumption, is critical for household food security, and any supply disruptions could trigger social unrest in India.

Countermeasures: Seeking Diversified Imports or Accelerating Energy Transition

Experts believe that in response to the current energy difficulties, many developing countries are either seeking to diversify energy imports or considering accelerating domestic energy transition to reduce structural dependence on fossil fuels, with renewable energy transition gaining new momentum.

Bakhshi believes that India needs to adopt multiple measures to address its energy supply vulnerabilities, including promoting diversification of energy sources, expanding reserves, upgrading infrastructure, and accelerating energy transition. In the long term, expanding storage infrastructure for LPG and liquefied natural gas (LNG) can provide important buffers against energy disruptions. Additionally, speeding up India’s domestic energy restructuring is crucial to reduce dependence on imported fossil fuels.

Faced with energy shortages, the Philippines is eager to broaden import channels. Senior columnist Li Tianrong of The Philippine Star believes that the country urgently needs to attract foreign investment into solar energy, battery storage, and electric vehicle manufacturing, to deeply integrate into the global green supply chain.

International Energy Agency (IEA) Director Fatih Birol predicts that this energy crisis will prompt governments worldwide to initiate a new round of policy adjustments. He believes that the transition to renewable energy will gain new momentum, nuclear power will be re-emphasized, and the electric vehicle industry will be promoted, but at the same time, there will be a renewed reliance on coal rather than natural gas.

Original Title: “Overview | Middle East conflicts impact developing countries, possibly accelerating energy transition”

Column Editor: Jiang Zhuyun Text Editor: Yin Shangsheng Cover Image Source: Xinhua News Agency

Source: Author: Xinhua News Agency

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