ASEAN sounds alarm as US-Iran fighting threatens energy supplies | DW News

[00:00:00]The economic fallout from the disruption of oil exports through the Strait of Hormuz is causing concern around the world and it's high on the agenda as Southeast Asian foreign ministers meet in Manila. The 10th consecutive day of fighting between the US and Iran has effectively ended their ceasefire deal.

[00:00:19]Iran's Revolutionary Guard said on a Tuesday that they'd stopped two oil tankers attempting to pass through the Strait of Hormuz. United States responded with further strikes on Iranian military sites that it says have been used to had been used to attack commercial shipping.

[00:00:37]Well, the Strait of Hormuz is one of the world's most important energy routes, which normally carries around a fifth of global oil supplies.

[00:00:44]Prolonged disruption threatens higher fuel prices, inflation, and shortages far beyond the Middle East. The risk could further escalate after Iran's Houthi allies in Yemen threatened to blockade Saudi ports. That could restrict Saudi Arabia's ability to bypass the Strait of Hormuz by exporting oil through the Red Sea.

[00:01:08]Well, Southeast Asia is particularly exposed. Many countries in the ASEAN group of nations depend heavily on oil and gas from the Middle East, while higher energy costs would quickly feed through into transport, food prices, and manufacturing.

[00:01:23]Meeting in Manila, ASEAN foreign ministers have called for an immediate halt to the fighting and the full and safe reopening of the Strait. Philippine Foreign Affairs Secretary Maria Teresa Lazaro has said the issue was so urgent that ministers have decided to issue a separate statement.

[00:01:41]>> Ladies and gentlemen, >> serious concern on the developments of the Middle East. In fact, if you notice, this is just one this this is the only document that involves geopolitics in our discussions.

[00:01:54]This is of such urgency that we have to release the document as soon as possible.

[00:02:00]>> Ben Bland is a former foreign correspondent covering Southeast Asia.

[00:02:04]He's now director of the Asia Pacific program at the Chatham House International Affairs think tank.

[00:02:09]Welcome to the DW. Um ASEAN usually avoids taking strong positions on conflicts outside the region. What does the speed and urgency of their statement about the Iran war in the Strait of Hormuz tell us about the block's view of the threat?

[00:02:27]>> Well, it tells us they've been really badly affected. We know that the vast majority of the energy exports going through the Strait of Hormuz are going to Asia overall, and much of that is to to Southeast Asia's fast-growing and energy-hungry economies. There's millions of Southeast Asians who are working in the Gulf region who've been directly affected. Their remittances have been hit. So, there's been a direct economic impact on the region, and we'd expect further follow-throughs because of higher energy and fertilizer prices to kick through and cause more economic damage down the line. But, it's important to point out that you know, you say that ASEAN's taken a position.

[00:03:03]What they've said is they want to come together. They want the war to end. They want free access to the Strait of Hormuz. They haven't taken a strong position on who's at fault here, or they haven't called on any particular side to respond to this issue. So, I think it's important to understand they have maintained their sort of position of neutrality that's always been at the heart of the ASEAN way of doing things.

[00:03:23]>> And which countries are most exposed?

[00:03:28]>> The Philippines has been particularly hard hit because it really imports a huge amount of energy from the region.

[00:03:33]It also has a really big diaspora in the region. Um Indonesia has been hit in its own ways, although it's had its own issues going on economically. Vietnam as well is another big importer of energy.

[00:03:47]Um so, generally, it's the larger, poorer economies that have been hit the most, and particularly those that were importing all of their energy from the region or that had a lot of workers out there.

[00:03:57]>> Uh and and we've seen that that the Philippines has declared an energy emergency and ASEAN is discus- is discussing an oil sharing mechanism. How how much can national and regional governments realistically do if the supplies through Hormuz remain restricted for weeks rather than days?

[00:04:16]>> I think there's two challenges here. One is the short-term supply issue where I think countries in the region can help each other not just Southeast Asian countries, but Japan has had a generous offer to provide financial assistance and potentially energy supplies to the region. China hasn't yet offered much material support, but it certainly could do if it wanted to. So, there's the the short-term challenge if you like. Then there's the long-term challenge of what do these countries do about their energy security? How do they they ensure that in the next 5, 10, 15, 20 years they're less reliant on the source of geopolitical choke points that, you know, the Straits of Hormuz is just one example of. And I think there the challenge is is a much, much bigger one.

[00:04:59]It's about what countries can do individually, but it's also about the mechanisms that Southeast Asian countries and ASEAN as an organization might be able to develop to share energy resources between them to build a shared grid, uh to build shared renewable energy, for example. So, I think there's a lot of potential there, but to get to that point there are a lot of internal barriers um within the block that countries are going to have to overcome.

[00:05:22]>> Meanwhile, that the US, Russia, and China, they're not members of ASEAN, but Marco Rubio, Wang Yi, and Sergey Lavrov will all be at the meeting in Manila, which as I understand it is usual, but these are unusual times. What does each of them want from this meeting?

[00:05:42]>> Yeah, typically all the main dialogue partners of ASEAN, which include the US, China, and Russia, as well as India, the UK, and others would send their foreign ministers to to this meeting. So, this isn't entirely normal process, and it underlines that ASEAN really is at the heart of the diplomatic and security architecture in Asia, not just for Southeast Asia, but for these other much greater powers. What do they want? I think they all want different things from the region, and the region wants different things from them. Uh particularly at a moment like this, we've seen the US following a foreign policy that looks much more like China or Russia in some senses, very unilateral, very transactional. So, in a way, they're all looking for their own short-term advantages. Probably China is the most long-term and strategic right now of those three countries, and what they're looking to do is bind the region ever closer to them in economic terms, in diplomatic terms. So, for Beijing, I think they see an opportunity when the US is doing a lot of harm economically to many of its partners in the region to bind themselves even more closer to their neighbors in Southeast Asia. I think for Russia, it's a much more transactional relationship, but they'll certainly be looking to make some rhetorical and diplomatic dividends from the frustrations with the US, because while the statements from ASEAN sort of don't blame any particular parties, of course, in reality, everyone knows that it's the US that is largely to blame for this current conflict that's caused the economic damage that Southeast Asia's facing.

[00:07:13]>> Yeah, China's presence and and relationship with ASEAN is interesting.

[00:07:17]How How much are China's aggressive tactics in the South China Sea is likely to overshadow events? Bearing in mind that, you know, even this week saw another clash between Chinese forces and Filipino sailors in the Second Thomas Shoal, I think it is.

[00:07:34]>> Well, China is a really large and sophisticated player in in the world and in the region where it is the largest growing power. So, I think Beijing has tried to and has largely been successful in maintaining both an aggressive stance when it comes to the South China Sea, the Taiwan and these other core sovereignty and territorial interests as Beijing would see it. While on the other hand, trying to deepen its diplomatic, technological, and economic links with the region. And by and large, it's been able to do that by virtue of its size, its scale. So, while the Philippines, for example, is is rightly really unhappy with the assertive and aggressive ways that the Chinese navy and Chinese fishing fleets have been meddling in in Philippines exclusive economic zone and harassing Philippines fishing fleets, which is nothing new. At the same time, as the Philippines thinks about its future energy supplies and needing to reduce its reliance on imports through the Strait of Hormuz, well, China's going to be one of the biggest partners, whether that's potentially joint oil and gas exploration in the South China Sea or the adoption of renewable energy, the cheap solar panels, wind turbines, electric vehicles, grid infrastructure that China is the largest and cheapest provider of in the world. So, there's a really delicate balance and up to now, I think Beijing's been able to get away with both the strong hand on security and maybe a a slightly softer hand when it comes to diplomatic and economic engagement. And ultimately, I think the Philippines looks quite isolated in the region in still holding a tough line on these sovereignty disputes. The other countries that have overlapping and competing claims in the South China Sea, Malaysia, Vietnam, Brunei, they've really toned down their pushback against Beijing in recent few years as they almost see it in their view, I think, an inevitability of China coming to dominate the region. I don't think it's inevitable, but I think that's what's driving many of China's partners to basically concede and think at the end of the day, they need to keep the giant dragon on side rather than risk antagonizing it.

[00:09:36]>> It's It's an interesting phenomenon, isn't it? That that whatever you you you you kind of have to keep your eye on lots of things going on around the world at the same time. And this this ASEAN meeting not making massive headlines on this side of the world, but there is a pretty significant sort of collision of geopolitics going on. The Iran war threatening oil and trade. You've got the South China Sea as a flash point.

[00:10:01]And and the US and and ASEAN members and the this sort of great power competition for regional dominance. That's all going on quietly behind the scene Well, I say behind the scenes, but over there where it's where we should all be perhaps paying more attention to what's going on.

[00:10:21]>> Yeah, I think there really does need to be more attention paid in Europe to Southeast Asia. I know the German leadership was recently in the region.

[00:10:28]The the UK and the EU as a whole have also been looking to boost their ties in Southeast Asia because actually we face many of the same challenges, whether it's China's assertive stance on security issues, whether it's the Chinese manufacturing power that's threatening some of our key industries.

[00:10:47]Yeah, that's a common challenge for Southeast Asia and and for Europe. And also the challenge of managing relations with the US and finding your place amid this US-China competition, which is probably going to be a defining tension point of our geopolitical times.

[00:11:03]So, I think there's a lot in common and countries in Southeast Asia are looking for options. They don't want to be forced to choose between just the US and just China. And I think that's the same for us here in Europe. We need options.

[00:11:14]So, while of course the levels of economic development, the political systems in Southeast Asia are really quite diverse even from each other and certainly very different from Europe.

[00:11:23]And ASEAN as an institution is very different from the EU. It's not a supernational one like the EU. I think there's still a lot more that Southeast Asian countries and European countries can do together on economics, on trade, on geopolitics to help each other rather than just sitting around and waiting for the two great superpowers of our time to pick us off.

[00:11:45]>> And so if we finish sort of where we started with the the crisis in the the Strait of Hormuz, it does seem a bit like COVID that what this crisis is doing is accelerating the urgency of a number of long-standing concerns, which include things like tensions over the South China Sea, US and China fighting for dominance, and supply chain resilience as well.

[00:12:08]>> Yeah, I think it should be a wake-up call. To be honest, I don't want to sound long in the tooth here. What would concern me is that we've had a lot of wake-up calls in the past. I remember floods in Thailand in 2011 that disrupted global supplies of hard disk drives when those were still a thing.

[00:12:25]Um we remember COVID and the supply disruptions there. And I think at the time everyone says this should change the way we produce things, the way we store goods, the way our countries connect with each other. But what you tend to see happen is as the crisis sort of fades or is resolved in the short term, governments, societies, companies pull back from making the kind of long-term investments they need to bring more resilience to our societies and our economies. So my hope is that this wake-up call will drive ASEAN to integrate more. It will drive Europe and Southeast Asia to engage more with each other and think about these long-term trends. My fear is that as and when the Strait of Hormuz crisis is resolved in the short term, people just look the other way and go back to business as usual.

[00:13:07]>> Good talking to you, Ben. Thanks so much for talking us through that. Ben Bland from Chatham House.