Fuel rations and cash handouts: Iran war energy shock hits Asia – The Latest

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0:47Across the region there's long queues at gas stations, you even have some temples halting cremations. Farmers can't get enough diesel to power their machinery. It's really affecting people who are the poorest. President Marcos of the Philippines, he said we are victims of a war that's not our choosing. And I think that probably does sum up how a lot of people feel. Fuel rations, cash handouts and no aircon. How the Iran war is causing an energy shock in Southeast Asia. From the Guardians today in Focus, this is The Latest with me, Lucy Half. Well, I'm joined by Rebecca Ratcliffe, who's dialing in from Bangkok.

1:27Thanks so much for dialing in Rebecca I know it's late where you are so you cover Southeast Asia and I think from your reporting it's clear that the war in the Middle East is having an impact in countries there in a way that perhaps here in the West we're not seeing it in quite the same way yet the International Energy Agency the IEA says that this is the biggest oil supply shock in history so from your reporting uh what what does that look like on the ground and and what measures are people being asked to take yeah the impact is already very immediate and very visible here um across the region there's long queues at gas stations lots of gas stations with notices saying that they've run out of supplies in lao at one point earlier this month 40 percent of gas stations were closed um in thailand And likewise, long queues at gas stations, people queuing overnight.

2:22And the effect, it's affecting lots of different industries and areas of life. So bigger companies have warned about possible disruption to supplies or price increases. You even have some temples halting cremations, fishers who can't go out on their boats because they just can't afford the fuel or can't access it. farmers can't get enough diesel to power their machinery or you know keep their water pumps going for their rice paddies I spoke to a farmer yesterday who she has quite a large farm and she's due to harvest off-season seeds very soon which she will export to the US to Japan and also sell to farmers in Thailand and she needs to get going but she just can't she can't find any diesel She's been to her local gas station repeatedly.

3:12She queued for two hours on Tuesday and she was only able to get about 500 baht worth of diesel, which is about 12 pounds. It really doesn't go very far on a large farm. And yeah, as we all know, like farming, so time sensitive. So her story isn't unique. It's similar across Thailand and across the region. And there must be issues in terms of managing workplaces, right, which demand air conditioning to make people comfortable. Lots of governments in the region have encouraged people to work from home. Either they've asked government staff to work from home or they've been in Vietnam, for example.

3:48The government's told businesses to encourage their staff to work from home to try and reduce power burden. Everyone's been told to reduce their AC usage. That's a clear message. In Thailand, officials have been told to wear short-sleeved shirts and no neckties, unless they're going to an official ceremony, to try and reduce the reliance on air conditioning. And there were some news anchors on Thai TV who took off their jackets on air to try and, you know, illustrate this point. But yeah, as you said, it's very hot in the region right now. It's entering the hottest months. And it's quite hard for people to go completely without air conditioning.

4:28And just explain, Rebecca, why Southeast Asia is being hit so hard and fast in this way, because it is really reliant on energy that passes from the Gulf states through the Strait of Hamos, isn't it? And that means that countries like Thailand, like the Philippines, are really exposed to this disruption. Yeah, that's exactly it. They rely on imported energy and much of it is coming from the Middle East. So the Philippines, for example, depends on it for like 90 % of its oil requirements. And then another additional factor is that the picture kind of varies across the region, but some countries don't have very strong reserves.

5:07So it's been reported that Vietnam, for example, only has enough energy to cover about 20 days of domestic consumption. If you compare that with somewhere like Japan, which has very large reserves that can cover 250 days, you can see it's quite a stark difference and that just makes them more exposed. Yeah and it's interesting about China isn't it which has been relatively buffeted as per some good reporting from our colleague Callum Jones about you know China's huge energy reserves but also its use of alternative technologies such as wind and solar that means it's quite it is able to be buffeted against this impact in that way.

5:48Yeah and definitely it's quite interesting that China said it was ready to work with Southeast Asia on energy shortages. And recently, the Philippine Energy Secretary met with the Chinese ambassador to discuss energy cooperation. I mean, the Philippines is a US ally. It has quite a tense relationship with China over recent years because they have frequent disputes over contested territory in the South China Sea. And it's interesting to see whether China can help the region in some way. So throughout Trump's term, China has always tried to present itself as a reliable partner in comparison to the US, which is under Trump, you know, very unpredictable.

6:26Before the Trump administration, the US was working hard to try and build its ties, build relationships in Southeast Asia. But since Trump's, you know, came into office again, this is just the latest economic headache that Southeast Asia have suffered at the hands of the US. I mean, if you look back to Trump's Liberation Day tariffs, countries like Myanmar, Cambodia, Laos were hit with some of the most punishing tariffs on the hands of Trump. So it does lend itself to China's arguments when it will try and present itself as a reliable strategic partner in the region. Which is quite a significant shift, isn't it?

7:04I mean, that could be in the long term, very defining if countries start to become more dependent on China as a result of this crisis. I think like Southeast Asia will be cautious about becoming too reliant. Southeast Asia always tries to balance its relationship with China and with the US and not to align itself too much with either side, generally speaking. But there must be, I mean, from what you've been saying, you know, people having to make these very big decisions in their day-to-day lives about, you know, farmers who aren't able to access their equipment, people really struggling to get into work, people having to work from home in very hot conditions, all of the disruption that you've been talking about and the government interventions.

7:48there must be a sense from people that you've been speaking to that this is a war that they did not choose to go into that's being carried out by the US and Israel and yet is having this huge impact on their day-to-day lives. Yeah for sure and I think President Marcos of the Philippines kind of he said we're victims of a war that's not our choosing and I think that probably does sum up how a lot of people feel albeit there might be some anger towards domestic governments at how they're handling things, you know, and whether they're doing enough. But absolutely, like people in this region are so affected.

8:21And, you know, if you look at the Philippines, for example, it's not just people at home, it's also migrant workers. There are lots of overseas Filipinos workers who are stationed across the Middle East who are now stuck in war zones. I mean, there were jeepney drivers and people who are reliant on fuel for their, you know, their livelihoods. Jeepneys are the kind of like the backbone of the transport system in the Philippines. they're seeing their incomes drop dramatically, like more than half compared to what they were before the war. So it's really affecting people who are the poorest. And I think there is this real sense of how unfair it is.

9:02And so if we're talking about this kind of fast, sharp shock, you know, like if the Strait of Hamus remains blockaded in the weeks to come, I mean, we are in this sort of situation of deadlock at the moment with lots and lots of uncertainty about when this conflict may end. I mean, how long can governments sustain that level of subsidy, this type of advice to their citizens? Could it get substantially worse in the longer term? Yeah, I think that's the question that everyone's wondering and that governments are wondering. I mean, if you look at what support they are providing, Thailand has diesel subsidies that are very burdensome.

9:40They're costing, well, the reports were that they were costing£22 million a day. how long can they maintain that? In the Philippines, there have been cash handouts. For example, the Jeepney drivers and tricycle drivers received handouts of about£60 in cash aid last week. But that's not enough to tide people over in the long term in such a severe crisis. Yeah, I don't think anyone knows the answer to that question and what will happen if this goes on for longer and longer. And also the effects, if you look at farmers, for example, if they're taking a hit now, perhaps they can't afford to use as much fertiliser.

10:16Perhaps they're going to skip on fertiliser because fertiliser is also, the supplies of that are also disrupted because lots of it is coming from the Middle East. So if they use less fertiliser, you know, they're going to have less produce. There's going to be even greater strain on food supplies. It gets worse and worse. You know, those farmers will have less income later in the year and the food prices will also go up. It's just astounding, the ripple effect of this conflict around the world. Thank you so much for sharing your reporting, Rebecca. Thank you for having me. That's it for today.

10:48My huge thanks again to Rebecca Ratcliffe, The Guardian's Southeast Asia correspondent. You can keep up with her reporting over at theguardian.com. And do listen to our sister podcast, Politics Weekly America, where Jonathan Friedman will be speaking to one of Kamala Harris's former national security advisors about what's really behind Trump's latest tantrums over Iran. Thanks for listening to this episode of The Latest, the new evening edition of Today in Focus. Today in Focus will be back in your feeds as usual on Monday morning. The Latest will be back on Monday night. Have a lovely weekend.

11:19This episode was presented by me, Lucy Hoff. It was produced by Bryony Moore. The senior producer was Randa Ramgobin and the lead producer was Zoe Hitch.

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