By Nicholas Larsen, International Banker
On the surface, it may appear that surging oil and gas prices have been the most significant energy-related consequence of the 2026 war in Iran. Truth be told, however, the conflict has triggered a more profound change in how governments approach energy security, with the disruption to shipping through the Strait of Hormuz serving as a timely reminder of the fragility of global trade routes for fossil fuels. For countries that depend heavily on imported fuel, economic stability has been consistently threatened by geopolitical unrest since late February. As such, nuclear power is being pushed back towards the centre of discussions on strategies for ensuring long-term energy stability.
By no means did the war create this expedited demand for energy diversification among affected nations. Indeed, the conflict in Ukraine had already taught several European countries that dependence on a single source of natural gas carries enormous economic risks.
This year’s hostilities in West Asia, however, are teaching governments that even dependence on friendly energy suppliers can become a liability, especially if the supply routes themselves become vulnerable. “This energy shock is prompting not just the short-term responses. But a deeper reassessment of policy priorities and investment strategies by governments,” according to Sue-Ern Tan, head of the International Energy Agency’s (IEA’s) Regional Cooperation Centre in Singapore.
Asia, Southeast Asia in particular, represents arguably the most impacted region. According to the IEA, around 60 percent of Southeast Asia’s imports of crude oil and a third of its gas imports (as well as a staggering 94 percent of Japan’s crude-oil imports) came from the Middle East just prior to the conflict, while 45 percent of its oil-product supply was dependent on the region’s crude.
Bangladesh purchased liquefied natural gas (LNG) at prices several times higher than normal. The Philippines declared a national energy emergency. Indonesia, Malaysia, Thailand and Vietnam implemented emergency measures to reduce fuel consumption. And governments across the region were forced to confront the uncomfortable reality that economic growth remained heavily dependent on supply chains they did not control.
“The current Middle East crisis has tested Southeast Asia’s energy security and affordability, exposing the limits of short-term responses,” the IEA recently noted in its June 2026 “Southeast Asia Energy Outlook 2026”. “The region was heavily exposed to Middle Eastern supply, both through direct crude oil and gas imports and through refined product trade.”
The conflict has not fundamentally changed Southeast Asia’s energy strategy. Rather, it has accelerated policies that were already emerging in the areas of diversification, electrification and energy resilience. “Before February 2026, Asian policymakers had understood in theory that their dependence on Persian Gulf energy was a vulnerability. The crisis transformed that abstract vulnerability into an emergency,” the Council on Foreign Relations’ Joshua Kurlantzick explained in a piece published on June 23. “The regional response has materialized quickly—faster than one might have expected from governments that had, for years, moved at an unhurried pace on the energy transition,” Kurlantzick, the CFR’s senior fellow for Southeast Asia and South Asia, added.
Nuclear power is a key part of that strategic response, alongside renewable energy, grid expansion, efficiency improvements and regional electricity integration.
Nuclear power is a key part of that strategic response, alongside renewable energy, grid expansion, efficiency improvements and regional electricity integration. “We are in the midst of the largest energy security crisis the world has ever faced,” the IEA’s executive director, Fatih Birol, acknowledged in late May. “We are already seeing intensified efforts…to turn more to domestically available resources. These range from renewables and nuclear to coal, oil and gas…. Diversification of energy sources and supply routes is now a central priority.”
As strategic assets capable of strengthening national resilience, nuclear power plants can generate electricity domestically for decades, unlike imported oil or natural gas. Fuel requirements are small, uranium can be stockpiled for years, and electricity production is largely insulated from short-term disruptions in maritime trade or commodity markets. For policymakers, therefore, nuclear power represents much lower reliance on vulnerable shipping routes, less exposure to fossil-fuel price volatility and more predictable power generation.
Indeed, several governments are now laying the groundwork for their first nuclear reactors, reopening dormant projects and accelerating existing nuclear programmes. Their objectives extend well beyond simply reducing carbon emissions; by providing decades of reliable electricity without continuous dependence on vulnerable oil and gas supply routes, nuclear energy’s profile as a strategic asset that strengthens energy sovereignty is being considerably enhanced in 2026.
The International Energy Agency projected Southeast Asia would account for nearly 20 percent of global energy-demand growth through 2035, driven in part by rapidly expanding data centres. Malaysia already hosts over one hundred of operational data centres, with hundreds more under construction or in planning, while similar investments are spreading across Indonesia, Thailand, Singapore, Vietnam and the Philippines. Meeting this demand requires vast quantities of reliable electricity, making dependable baseload generation increasingly valuable.
Moreover, the policy response from governments across the region is already evident. Vietnam has revived plans to build two nuclear reactors; Malaysia is in discussion to potentially its first reactor online by 2031; Indonesia is pursuing the development of small modular reactors; Thailand has set nuclear-generation targets; and the Philippines has established a dedicated nuclear regulatory authority while exploring multiple deployment options.
“We are not anticipating that nuclear electricity will be cheap at the onset,” Alvie Asuncion-Astronomo of the Philippine Nuclear Research Institute acknowledged to the Associated Press, adding that the fuel will improve the Philippines’ long-term energy reliability, security, independence and eventually costs. “The ongoing conflict in the Middle East definitely demonstrates how volatile fossil fuel costs are and the instability of the supply. Nuclear is an alternative solution that can give us more self-reliance in terms of energy.”
Even countries without firm nuclear commitments are moving closer. Singapore has invited the International Atomic Energy Agency (IAEA) to conduct a formal review of its preparedness for future nuclear deployment. “We cannot depend on any single fuel source, supplier or technology. We have to pursue multiple pathways at the same time—balancing security, affordability and sustainability,” Singapore’s Prime Minister Lawrence Wong recently confirmed.
The renewed interest is already showing up in international nuclear governance. The International Atomic Energy Agency has expanded its work with newcomer countries through infrastructure-review missions, while the World Nuclear Association (WNA) noted that around 80 reactors are currently under construction worldwide, with roughly 120 more planned—most of them in Asia.
Almost 40 nations have jointly committed to tripling their installed nuclear-energy capacity by 2050, with Southeast Asia accounting for nearly one-quarter of the 157 gigawatts (GW) projected to be supplied by “newcomer nuclear nations”, according to the World Nuclear Association. “There is a more serious, new and growing momentum for the development of nuclear energy in Southeast Asia,” said King Lee, the Association’s head of policy and industry engagement.
“Many Southeast Asian countries are exploring or advancing their plans to incorporate nuclear energy in their energy systems. In the Philippines, plans centre around reviving the Bataan Nuclear Power Plant, as well as exploring the feasibility of small modular reactors,” according to the Nuclear Energy Agency (NEA). “Several other Southeast Asian countries—including Indonesia, Malaysia, Thailand and Viet Nam—are similarly making renewed commitments to nuclear energy. Other non-power-related nuclear activities important in the Southeast Asian region include nuclear medicine, nuclear applications in agriculture, mining research reactors, and emergency preparedness and response.”
“Today there are about 440 nuclear power reactors operating in 31 countries, with a combined capacity of about 400 GWe. In 2024, these provided 2667 TWh, about 9 percent of the world’s electricity,” the World Nuclear Association confirmed. “About 120 power reactors with a total gross capacity of about 110 GWe are planned, and over 300 more are proposed. Most reactors currently planned are in countries in Asia, characterised by fast-growing economies and rapidly rising electricity demand.”
The Persian Gulf conflict has exposed a structural weakness in the global energy system: heavy dependence on imported hydrocarbons transported through maritime chokepoints.
The Persian Gulf conflict has exposed a structural weakness in the global energy system: heavy dependence on imported hydrocarbons transported through maritime chokepoints. Nuclear power is benefiting because it offers something many governments now value more than at any time in recent decades: domestically controlled, dispatchable electricity that is largely insulated from oil and gas supply disruptions. With countries consequently accelerating away from an energy system optimised for efficiency and low cost towards one optimised for resilience, sovereignty and security, nuclear energy is proving to be one of the principal beneficiaries.
Events in 2026 have not suddenly made nuclear technology more attractive in isolation. Rather, it has exposed the strategic risks of electricity systems that rely heavily on imported fossil fuels moving through vulnerable maritime transit routes. As governments redesign their energy systems around resilience and security rather than cost alone, nuclear power has become an increasingly compelling option alongside renewables, grids, storage and efficiency and is now favourably positioned as a strategic hedge against geopolitical-related energy vulnerabilities.