Southeast Asia’s energy demand will roughly double by 2050, and Singapore’s position as a regional energy trading center will help the region optimize its energy structure, allowing industry players to obtain more information and make smarter decisions.
Sanjeev Gupta, head of Asia Pacific oil and gas at EY-Parthenon, expressed the above view when asked about energy supply at a press conference.
The recent conflict between Israel and Iran has caused oil prices to soar from more than $60 per barrel to more than $70. Sanjeev believes that this price only reflects some impact on oil supply, “but if the Strait of Hormuz is blocked, not only will oil prices soar to $100 per barrel, but whether oil supply can be obtained is even more of a problem.”
He said: “The blockade of the Strait of Hormuz will affect one-fifth of the world’s oil supply, and no one can fill this gap.” Even the United States, the largest oil producer, cannot.
Market perception has changed, energy security has become a priority
According to Andy Brogan, head of energy at EY-Parthenon, market perception has changed since the Russian-Ukrainian war, and energy security has become a priority.
Sanjeev believes that countries have therefore paid more attention to ensuring the diversification of energy sources, and Singapore’s development as an energy trading hub can enable industry players to obtain more information and help optimize the energy source portfolio.
EY-Parthenon predicts that by 2050, Southeast Asia’s energy demand will be 71% higher than in 2024, driven by economic and population growth, including a surge in data center demand for electricity.
Sanjeev pointed out that by 2030, coal will account for 44% of Southeast Asia’s energy supply and will continue to be an important backbone of the region’s energy security needs until cleaner energy can be fully replaced. Southeast Asia’s natural gas demand will double by 2050, but natural gas production is declining because natural gas fields are rapidly depleting. This will make Southeast Asia a net importer of natural gas by 2030.
He believes that investment, stronger policies, and regional cooperation are important for the development of clean energy. However, due to different regulations and situations in different countries, regional cooperation faces many difficulties, so bilateral cooperation is easier to achieve.
Currently, Singapore remains the only country in Southeast Asia to implement a carbon tax, while Indonesia and Thailand are still developing their own carbon pricing frameworks. Sanjeev pointed out that the impact of carbon taxes on costs varies from country to country and industry to industry, but energy-intensive industries face greater pressure to decarbonize. In addition, investor expectations are increasing the cost burden, especially for multinational companies.