The closure of the Strait of Hormuz has often been framed as an ASEAN oil-shock story, and in many ways it is. But beneath the headline numbers lies a more nuanced picture: a human ledger of pain and an economic index that does not always match the most obvious candidates.
Indonesia's rupiah, for instance, made for easy '1997 all over again' headlines. In late February, the country's import bill for crude ballooned, draining dollars and hammering the currency. By June, the rupiah had broken through levels not seen even during the 1997 Asian financial crisis, which had spilled across the region to Bangkok and earned the nickname 'tom yum kung crisis.'
Analysts have rightly noted that the comparison is more evocative than exact. Private dollar debt today is far smaller than in the late 1990s, and the current depreciation looks more like a painful but manageable balance-of-payments adjustment than a prelude to a banking collapse. Yet the headline wrote itself, and headlines shape how a crisis is remembered—even when the country with the scariest charts is not the one where the economy hurts the most.
The Philippines: the real casualty
The true ASEAN casualty of the Hormuz crisis is the Philippines. Fourth-largest ASEAN nation by land mass and second by population, it has been largely overlooked in the crisis narrative. The Philippines does not have a strategic reserve problem so much as a dependency problem: near-total reliance on Gulf crude, backed by next-to-no commercial fuel buffers.
The result was a declared state of national energy emergency—Executive Order 110, a one-year mandate—and jeepney drivers striking over fares they could no longer absorb. President Ferdinand Marcos Jr. signed the order in late March, citing the strait's closure as a direct threat to energy security and authorizing measures against hoarding and price manipulation, alongside a broader livelihoods-and-transport-support package.
By July, commentators were still pointing out that the emergency declaration bought time but did not fix the underlying exposure. Diesel prices had seen some of the steepest increases worldwide, and analysts used the president's mid-year address to press the point: the Philippines lacks a strategic petroleum reserve and the grid modernization needed to absorb renewable capacity that might eventually reduce the exposure. A one-year emergency mandate is not a substitute for structural buffers—a crucial point that got buried, as such things unfortunately do, by striking jeepney drivers.
In March and April, pump prices in the Philippines were approximately double those of Malaysia, Vietnam, and Thailand—same crisis, wildly different pain points depending on each country's fuel subsidies and import structures.
Laos: ASEAN's smallest battery
Laos, landlocked and with fewer than eight million people, is one of ASEAN's smallest economies at around US$16–18 billion GDP. It had zero domestic oil production when the crisis hit. Hundreds of fuel stations closed by March, diesel prices rose over 100% within a single month, and school weeks had to be cut short. For a few weeks ahead of the Lao New Year (pi mai Lao), the empty pumps and shortened school terms made Laos look like a regional casualty that would likely come out of 2026 with a permanent limp.
The quiet reprieve was barely noticed. Through March and April, Thai officials stuck to exporting refined fuel to Laos even as they cut most other exports to protect their own reserves—despite absorbing a 50% cut to their own crude supply from the Hormuz closure. By June, Laos and Thailand's state energy company had signed a formal cross-border supply agreement, and Vientiane had reinstated the higher fuel taxes it had suspended during the crisis—a quiet signal that the emergency had passed.
Why did Thailand keep the lifeline open when its own reserves were under strain? The reason is that its relationship with Laos runs two ways. Thai officials noted that fuel exports to Laos and Myanmar are tied to Thailand's own hydropower imports from Laos—energy cooperation that cuts in both directions. Bangkok has since moved to deepen that dependency further, increasing its hydropower purchases from Laos as part of its own energy diversification. Laos, in other words, was never purely a supplicant; its dams give Thailand something it needs.
If there is a valuable takeaway from the Hormuz crisis for the region, it is that active business relationships count for more than who has the biggest economy. Laos, it turns out, has more than one relationship to lean on. Its hydropower flows not just to Thailand but into a wider regional grid, and in May, Russia was reportedly exploring its first-ever petroleum exports to Laos via Vietnamese ports—one more channel opening up for a country that, on paper, should have had none.
A regional undercurrent running through all of this has little to do with oil. Thailand's energy relationship with Laos cannot be separated from the unresolved border tension between Thailand and Cambodia, which continues to shape energy and security calculations across the region. As ASEAN navigates the fallout, the crisis has underscored the importance of ASEAN's central role in regional diplomacy, even as no single chair can shift the South China Sea consensus. Meanwhile, the Hormuz standoff itself remains a reminder that coercion erodes trust, as Iran's dilemma shows.
