The conflict between the US, Israel, and Iran has persisted for nearly two weeks, with no signs of abating. Oil prices on march 10 fell by 11% after US President Donald Trump asserted that their objectives had been met and the conflict with Iran would soon conclude. However, subsequent firm statements from Iran and unpredictable military developments caused oil prices to rebound.

Brent crude currently rose 2,5% to 90 USD per barrel. US WTI crude saw a similar increase, reaching 85 USD.

The Strait of Hormuz, a vital global oil and gas shipping route, has been paralyzed for over one week. Considered a lifeline for the Persian Gulf, it facilitates the transit of approximately 20% of the world's crude oil. Iran's Islamic Revolutionary Guard Corps (IRGC) affirmed earlier this week that "not one liter of oil" would leave the Middle East if the US and Israel continued their attacks.

These developments have compelled countries to seek solutions to mitigate the impact of surging fuel prices caused by energy supply disruptions.

**Imposing domestic fuel price caps**

On march 9, South Korean President Lee Jae Myung announced domestic fuel price caps, the first time in nearly 30 years. This week, gasoline prices at some South Korean fuel stations exceeded 1,900 won (1,28 USD) per liter, a three-year high.

Lee also stated that a 100 billion won (67 billion USD) market stabilization program could be expanded if necessary. The nation is seeking alternative supply sources as the Strait of Hormuz remains paralyzed. The Middle East conflict has prevented 1,7 million barrels of oil from reaching South Korea daily.

A man fills his tank at a fuel station in Seoul, South Korea, on march 9. Photo: Reuters

In Hungary, Prime Minister Viktor Orban announced that starting march 10, the government would cap fuel prices to protect consumers and businesses from rising crude oil costs. The price cap for one liter of gasoline in the country is 595 forint (1,75 USD), while diesel is 615 forint (1,8 USD). Hungary also plans to release strategic oil reserves to ensure supply.

The Croatian government also implemented a two-week fuel price cap solution amidst an escalating energy crisis. Accordingly, from march 10, gasoline was set at 1,5 euro per liter and diesel at 1,55 euro. Prime Minister Andrej Plenkovic stated that the government prioritizes ensuring stable energy supply and reasonable prices for its citizens and businesses.

**Subsidizing fuel costs**

The Japanese government is considering subsidizing energy costs to support small businesses and households. Speaking at a session of the Japanese Parliament on march 10, Prime Minister Takaichi Sanae noted that the government had been assessing the situation and considering emergency measures since early last week.

Japan imports approximately 95% of its oil from the Middle East, with 70% transiting through the Strait of Hormuz. The country is also the world's second-largest buyer of liquefied natural gas (LNG), with 11% of its supply originating from the region.

Although Japan's oil reserves currently equate to 254 days of consumption and corporate LNG reserves are sufficient for three weeks, Prime Minister Takaichi's government activated urgent response measures due to the escalating Middle East conflict. The government is considering measures such as supporting gasoline and diesel costs, as well as electricity and gas bills. She stated that the government would act before it was too late.

Japan and other G7 nations are also discussing plans to release strategic reserves to cool global oil prices.

Meanwhile, Indonesia increased fuel subsidies in its national budget, according to Indonesian Finance Minister Purbaya Yudhi Sadewa. The country currently allocates 381,300 billion rupiah (22,5 billion USD) for energy subsidies and to compensate state-owned companies Pertamia and PLN for maintaining reasonable electricity and gasoline prices.

The country may also revive plans to launch B50, a fuel blend of 50% palm oil biodiesel and 50% conventional diesel, an official from the Ministry of Energy stated. The "archipelago nation" is currently the world's largest producer of palm oil.

**School closures and remote work**

Bangladesh, which imports up to 95% of its fuel, opted to close all schools starting early this week. Officials explained that universities consume large amounts of electricity for dormitories, lecture halls, laboratories, and air conditioning systems. Early closure helps reduce pressure on the overloaded power grid. Additionally, giving students time off reduces strain on often-congested transportation systems, thereby minimizing fuel waste.

From march 6, the country also imposed daily fuel purchase limits after queues formed and people began hoarding gasoline.

People queue for gasoline in Dhaka, Bangladesh's capital, on march 8. Photo: AP

The Philippines activated several energy conservation measures starting march 9, including implementing a four-day work week for government employees and requiring state agencies to reduce electricity consumption. For example, government staff are asked to turn off lights and computers during lunch breaks and adjust air conditioning temperatures to no lower than 24°C.

President Ferdinand Marcos Jr. requested government agencies to reduce electricity and fuel costs by 10-20%. This regulation does not apply to emergency services. According to ING Think, the Philippines is vulnerable due to its reliance on the Middle East for nearly 90% of its oil supply.

In Thailand, Prime Minister Anutin Charnvirakul also instructed civil servants to implement energy-saving policies, ranging from working from home to limiting elevator use. They also advised civil servants to postpone overseas travel plans and prioritize using stairs instead of elevators in daily activities.

Public buildings will operate air conditioning at 26-27°C to conserve energy. Civil servants may switch to short-sleeved shirts instead of formal attire like suits. Employees must also turn off lights and electrical devices when not in use, limit photocopy machine use, and increase online meetings.

Remote work is also among the energy-saving solutions proposed by Vietnam's Ministry of Industry and Trade amidst a potential localized fuel shortage due to Middle East instability.

The Ministry assessed that localized fuel shortages could occur in some areas if military conflict in the Middle East escalates. Total domestic fuel consumption in 2025 is projected to reach approximately 28,6 million cubic meters or tons, averaging 2,2-2,3 million cubic meters or tons per month. Vietnam has two oil refineries (Nghi Son, Binh Son) but still significantly relies on imports.

**Reducing fuel taxes**

Italy also warned it might increase taxes on companies profiting from sharply rising crude oil prices. "I will do everything possible to prevent those who exploit this crisis from harming families and businesses", Prime Minister Giorgia Meloni declared on Italian television.

The Italian government is also considering activating a "flexible excise tax" mechanism, allowing it to use increased VAT revenue from high fuel prices to reduce excise duties on gasoline and diesel.

In the US, Democratic Senator Mark Kelly last week proposed temporarily suspending the federal gasoline tax, currently 18,4 cents (nearly 5,000 dong) per gallon. However, this requires congressional approval and could deplete federal highway funding.

Beyond regulatory tools, some countries are also using inspection and control measures at gas stations. The French government this week plans to inspect 500 gas stations due to concerns about excessive fuel price increases. Prime Minister Sebastien Lecornu stated that inspectors would visit sales points nationwide from march 9 to march 11, to ensure businesses do not exploit the situation to raise prices.

"The conflict in the Middle East must not become an excuse for unreasonable price increases at gas stations", he said.

Since the disruption of the Strait of Hormuz one week ago, the flow of oil and gas tankers through it has significantly decreased. Approximately 10 ships have been attacked in clashes, and many vessel operators have ceased using this route.

According to energy consultancy Rapidan Energy, the Middle East conflict has trapped a large volume of global oil in the Strait of Hormuz, pushing the world into a record supply shortage.

Saudi Arabia and the UAE hold most of the spare capacity, but their supplies are also currently disrupted due to the Strait of Hormuz blockade. These two nations are working to send several million barrels of oil daily south to the Red Sea via existing pipelines with surplus capacity, but this can only partially offset the lost output from the strait's closure.

Therefore, Rapidan Energy suggests that the global oil market will likely rebalance through demand destruction as oil prices surge. The US Strategic Petroleum Reserve (SPR) is deemed "limited and insufficient to fully offset" the oil currently trapped in the Persian Gulf region.

Sources from the WSJ indicated that the International Energy Agency (IEA) recently proposed that member countries release a record amount of oil from reserves to cool the market. This figure could exceed the 182 million barrels released in 2022 when the Russia-Ukraine conflict erupted.

Ha Thu (compiled)