The energy crisis is imminent, and the Philippines has entered a "nationwide state of emergency."

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Ongoing conflict in Iran continues to block the Strait of Hormuz, subjecting Asia’s energy supply chain to its most severe stress test in decades.

This week, Philippine President Ferdinand "Bongbong" Marcos Jr. signed Executive Order No. 110, declaring a nationwide energy emergency. The order grants the government the legal authority to control fuel prices and expedite fuel imports from alternative suppliers, initially effective for one year. Philippine authorities stated that at the current rate of consumption, existing fuel reserves would only last about 45 days.

The emergency declaration has triggered widespread market concerns over a domino effect in the Asian energy crisis. South Korea, Japan, Thailand, and Vietnam have successively launched energy-saving or strategic stockpile measures. Energy rationing pressures are spreading across the Asia-Pacific region and are likely to impact global commodity markets and related asset pricing.

Heavy Reliance on Hormuz: The Philippines in the Forefront

The Philippines' dependence on the Strait of Hormuz stands out among Asian countries. Statistics show that about 98% of oil shipments to the Philippines pass through the strait. The ongoing Middle East conflict has seriously disrupted regular passage, leaving the Philippines with almost no buffer for energy security.

Executive Order No. 110 provides the Philippine government with a suite of emergency tools, including: expediting procurement and importing fuel and petroleum products from alternative suppliers; imposing fuel price controls when necessary to prevent excessive price surges or hoarding for profit; ensuring orderly distribution of fuel, food, medicine, and other essentials; establishing an emergency coordination committee; authorizing advance payments in contracts to secure timely supply; and activating an "all-of-government" response framework covering livelihoods, industry, food, and transportation.

Multiple Asian Countries Implement Emergency Measures

The Philippine emergency declaration is not an isolated event, but part of a regional wave of energy emergency responses in Asia.

Just a day before the Philippines' announcement, South Korea launched a nationwide energy-saving campaign, urging the public to use bicycles for short trips and shorten shower times. Japan announced on Wednesday that it would soon release strategic oil reserves equivalent to 30 days’ supply. Thailand and Vietnam have also urged citizens to voluntarily cut energy consumption.

Analysts note that if oil and gas flows through the Strait of Hormuz cannot be restored in the coming months, Asian countries will face a historic risk of declining productivity. Unlike the United States, where only about 7% of imported oil passes through Hormuz, Asian nations have far more limited access to alternative energy sources.

Market Warning: Shadow of 1973 Oil Crisis Returns

Current circumstances evoke comparisons with the Arab oil embargo following the Yom Kippur War in 1973—the most similar historical precedent to today’s threats. That crisis, combined with a significant depreciation of the dollar, ultimately triggered sustained stagflation in the U.S. until 1981 and prompted the U.S. to aggressively pursue energy diversification to reduce dependence on OPEC.

Multiple stress signals have emerged in the current market: strong momentum in oil prices, sustained high volatility, and Brent crude shaping movements in equity and interest rate markets. At the same time, inflation expectations are rising rapidly, with markets repricing for a "second wave of inflation" scenario. Analysts say that if the yield on the US 10-year Treasury surpasses 4.4%, this pressure will spill over from the rates market to a broad cross-asset repricing, and the equity market has yet to fully reflect this.

For investors, developments in Asia’s energy crisis and the situation in the Strait of Hormuz will be among the core variables affecting global risk asset pricing in the coming weeks.

Risk Notice and DisclaimerThe market involves risk and investment should be approached cautiously. This article does not constitute personal investment advice, nor does it take into account the unique investment objectives, financial situation, or needs of any particular user. Users should consider whether any opinions, viewpoints, or conclusions herein are appropriate to their specific circumstances. Investing accordingly is at your own risk. ```