The report “Southeast Asia Energy Outlook 2026” published by the International Energy Agency (IEA) explores the trajectory that the Southeast Asian region was on prior to the conflict in the Middle East, and discusses the potential implications of the energy crisis triggered by this conflict for policy priorities and investment strategies in the region.

Some of the key highlights from the report are:

  • Southeast Asia is a very dynamic region that is set to be a major driver of global energy demand growth, but the Middle East conflict has provided a stark wake-up call for the region’s energy system. For the moment, governments are focused on managing the short-term energy impacts of the crisis. Immediate impacts have been felt most acutely in refining, petrochemicals, power generation and cooking fuels. A stronger and more co-ordinated regional response will be essential to address these challenges. 
  • Diversification is now a central priority for Southeast Asia, with clean energy, electrification and efficiency as key levers to reduce import exposure and strengthen resilience. Nuclear power remains a longer-term diversification option in Southeast Asia, but its role will depend on accelerating deployment and overcoming long lead times.
  • Coal is widely available in Southeast Asia and continues to play an important role in the energy system; it could see some upside from the renewed focus on energy security. Alongside supply-side measures, energy efficiency is a cost effective way to strengthen resilience in response to the crisis and in the longer term. 
  • Electricity is becoming ever more important to Southeast Asia’s energy future – electricity demand is already growing twice as fast as overall energy use. New uses of electricity are expanding and the shift to electric mobility, as well as bioenergy and low-emission transport fuels, could accelerate further in response to the crisis.
  • The outlook for electricity supply and emissions is increasingly shaped by the pace at which renewables and other sources of low-emissions power can be scaled up. Delivering this transition depends on an efficient build-out and use of enabling infrastructure, particularly grids and storage. 
  • Investment will be a key determinant of Southeast Asia’s future energy security. Financing conditions will be critical in determining whether required investment levels can be achieved. 
  • Southeast Asia’s energy transition is closely linked to its role in global industrial and supply chains, particularly for critical minerals and clean energy technologies. Ensuring that the development of Southeast Asia’s energy systems is fair and inclusive remains a central challenge. The Middle East conflict is both a stress test of Southeast Asia’s current energy system and a catalyst to accelerate structural change. 

Access the report here