Tanaka delivers his keynote address during the opening day of the APGH 2026 at BCCK on Tuesday. – Photo by Mohd Faisal Ahmad
KUCHING (June 9): Asia is facing a potentially severe third oil shock triggered by geopolitical tensions in the Middle East, making the transition to electricity and hydrogen more urgent than ever, said International Energy Agency (IEA) executive director emeritus Nobuo Tanaka.
He warned that disruptions to global oil supplies could have a disproportionate impact on Asia due to its heavy dependence on Middle Eastern energy imports.
“The first oil shock created the IEA in 1973. The second transformed industries and economies. Now we are facing a third oil shock, and Asia is at the centre of it,” he said.
Tanaka said this in his keynote address titled ‘New Energy Geopolitics: Battle Between Petrostates and Electrostates, How Can Asia Become a Winner’ during the opening day of the Asia Pacific Green Hydrogen Conference and Exhibition (APGH) 2026 at the Borneo Convention Centre Kuching (BCCK) on Tuesday.
According to him, the closure of the Strait of Hormuz represents a nightmare scenario for energy security, noting that replacing up to 15 million barrels of oil per day would be simply impossible.
He cautioned that oil prices could surge to record levels, potentially exceeding the previous historic high of US$147 per barrel, as inventories decline and seasonal demand rises.
“Ukraine was Europe’s gas crisis. This is Asia’s energy crisis,” he said.
Tanaka said the current geopolitical landscape is increasingly defined by a contest between ‘petrostates’ that rely on fossil fuel production and ‘electrostates’ that are rapidly electrifying their economies to reduce dependence on imported oil and gas.
He cited China and the European Union as leading examples of countries pursuing electrification and decarbonisation strategies, while Southeast Asia is making significant progress in electrification but still has work to do on decarbonisation.
“Thanks to electric vehicles, solar power, artificial intelligence and data centres, the age of electricity is here,” he said.
Tanaka noted that electric vehicle (EV) adoption is accelerating globally, particularly in Asia, with China leading the transition.
He pointed out that seven of the world’s top 15 EV manufacturers are Chinese companies.
“The demand for EVs is rising everywhere. The current crisis may further accelerate electrification because countries want to reduce dependence on imported oil,” he said.
Despite recent concerns over slower project development, Tanaka dismissed suggestions that the hydrogen economy had lost momentum.
Referring to recent IEA assessments, he said hydrogen development is entering a period of consolidation rather than decline, with electrolyser deployment continuing to expand.
“Don’t give up on hydrogen. We have to stay committed because hydrogen will be an important part of the future energy system,” he stressed.
Tanaka also highlighted nuclear energy, particularly small modular reactors (SMRs), as another key component of future low-carbon energy systems.
He called for greater regional cooperation through initiatives such as the Asean Power Grid and proposed broader energy connectivity across Asia, including potential links between Asean countries, China, Japan and South Korea.
“Asia has the opportunity to become a winner in this new energy geopolitics if we work together on electrification, hydrogen and regional energy integration,” he said.
He added that countries such as Malaysia and Japan could play important leadership roles in shaping a more sustainable and secure energy future for the region.
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