Welcome to Foreign Policy’s Southeast Asia Brief.
The highlights this week: Thai and Singaporean imports of natural gas face price hikes following the outbreak of war with Iran, a Japanese man is arrested on charges involving a nuclear material-for-guns scheme, and the Philippines investigates its own citizens on suspicion of spying for China.
Thailand and Singapore Are Losing the Iran War
For Southeast Asia, the most immediate effects of the spiraling U.S.-Israeli war with Iran are felt in the global energy markets. As Iran responds to attacks with its own strikes on major energy-producing neighbors—thus effectively pausing shipments through the Strait of Hormuz—prices of oil and gas are shooting up.
From the oil shock, no one is safe, and governments across the region are already scrambling to try to cushion the impact.
Only two countries—Myanmar and Cambodia—actually produce more crude oil than they consume, according to the International Energy Agency. And both lack the ability to take full advantage of this because they have either no or extremely limited refining capacity.
When you factor in natural gas, with U.S. natural gas futures up more than 20 percent since the strikes, Thailand and Singapore are particularly exposed. In an irony that they doubtless do not appreciate, they are—on paper—two of the United States’ closest partners in the region: One is a treaty ally and the other a close security partner.
Both countries use lots of imported gas, mainly to generate electricity. Much of it is imported from Middle Eastern suppliers—in particular, Qatar.
In 2024, Singapore generated 92.2 percent of its electricity from natural gas. It has no domestic gas reserves, so it must import everything.
Based on some back-of-the-envelope calculations using World Bank figures, about 14.6 percent of Singapore’s natural gas is shipped from Qatar. Qatar is Singapore’s second-biggest supplier of liquified natural gas (LNG) after Australia.
Thailand generated 68.4 percent of its electricity from gas in 2024. Domestic gas production covered 55.3 percent of Thailand’s needs.
Based on the same rough method used for Singapore, it seems that roughly 7.5 percent of Thailand’s gas comes from sources disrupted by the war: Qatar, Oman, and the United Arab Emirates.
That 7.5 percent may not sound like too much. But as many countries, including Thailand, discovered when Russia invaded Ukraine in 2022, electricity prices are set at the margin. That is, the most expensive method of generation sets the price for the whole market.
So on a hot day in Bangkok when the air conditioners are blasting, the price for the country is going to be set by a gas power plant that has had to scramble to buy gas after its supplies from the Middle East were cut.
Both Thailand and Singapore are rich enough to keep the lights on. As in 2022, the governments will likely end up cushioning the cost. But it will be expensive.
Some may note that the United States is not only sheltered from the worst of gas volatility due to its vast domestic gas production but will also actually profit off it in the form of LNG exports.
Other countries in the region are less exposed to this dynamic. Some countries use almost no gas, such as Cambodia, Laos, and Timor-Leste.
Some use gas but also produce more than enough to cover their own needs. These include, in descending order from the highest producers to the lowest, Myanmar, Brunei, Malaysia, Indonesia, and Vietnam (just about).
The Philippines has to import some gas, but it doesn’t do so from the Middle East.
In recent years, natural gas has been growing in popularity as a fuel. A 2025 report by the International Energy Agency projected that countries in the region would become major importers of LNG by the end of the decade, driven by growing demand and waning domestic production.
Two spikes of brutal price volatility due to geopolitical events in four years might push some to reconsider that trajectory.
More renewables, such as solar plus battery storage, might be one result. But another likely effect will be the region’s many major coal producers hanging on to that cheap and dirty fuel a little longer.
Atoms for guns. On Feb. 4 a New York court sentenced a Japanese man, alleged to be a powerful member of the yakuza, to 20 years in prison for his complicated scheme to sell nuclear material to Iran in order to then purchase guns and surface-to-air missiles for the United Wa State Army, a rebel group in Myanmar.
Little did he know that the proposed buyer, who was also supposedly interested in purchasing 1,100 pounds each of heroin and methamphetamine, was in fact an agent of the U.S. Drug Enforcement Administration (DEA).
Depending on who you believe, Takeshi Ebisawa was either a big yakuza boss (the DEA view) or a petty conman living down and out in Bangkok who made some promises that he shouldn’t have.
Whatever the case, based on material released, it seems that Ebisawa and his co-conspirators did manage to provide a sample of material with at least traces of uranium, thorium, and weapons-grade plutonium.
U.S. alliance debate. Supporters of former Philippine President Rodrigo Duterte and his daughter Sara Duterte have used the U.S. strikes on Iran to attack their country’s alliance with the United States.
The claim is that the U.S. action could make the Philippines a target for retaliation. Duterte and his family have long been critical of the country’s close relationship with Washington.
The Philippine military has dismissed the threat, pointing out that the country is well outside of Iranian missile range and that Iran lacks armed proxy groups in Southeast Asia.
Still, influential Filipinos with cooler heads are also discomfited. Francisco S. Tatad, a former cabinet minister and senator, penned a op-ed in the Manila Times on the risks of U.S. President Donald Trump’s aggressive foreign policy and domestic authoritarianism.
The United States once again embroiling itself in the Middle East is also further evidence to many of its inability to focus strategically on Asia and China. U.S. patrol flights over the South China Sea have reportedly already dropped by 30 percent from January to February.
Chinese spies scandal. On Feb. 4, the Philippines arrested three of its citizens on allegations of spying for China. The three people were members of the Department of National Defense, the Philippine Navy, and the Philippine Coast Guard.
Described as low-level analysts, the suspects are alleged to have handed over sensitive information—including details about Philippine resupply missions to its outposts in contested areas of the South China Sea and lists of military personnel.
The Chinese Embassy in Manila has denied all claims and warned that they could damage bilateral relations.
This is just the latest in a string of spy stories. November 2025 saw the dramatic conviction of Alice Guo, a small-town mayor, who in addition to being found guilty of human trafficking was widely accused of being a Chinese spy.
Last year, the Philippines arrested at least 19 people, including 13 Chinese nationals, on spying charges.
In April 2025, China also arrested three Filipinos whom it accused of spying. The Philippines has claimed that they are ordinary civilians arrested by China in retaliation for Manila’s crackdown.
Lawmakers are now working to update the Philippines’ old espionage laws to cover not just wartime but also peace time threats and cyberespionage.
People carry giant effigies symbolizing evil spirits during a parade ahead of Nyepi, the Balinese Day of Silence, in Jakarta, Indonesia, on March 8.Agoes Rudianto/Anadolu via Getty Images
A parade in Jakarta celebrates the coming of Nyepi, Bali’s New Year’s Eve. Practitioners of Balinese Hinduism parade effigies of Ogoh-ogoh, evil spirits, through the streets before setting them alight to purge the evil influences they represent. On March 19—the day of Nyepi itself, known as the “Day of Silence”—people will refrain from nearly all activity and engage in quiet self-reflection.
FP’s Most Read This Week
As Indonesians wake up in the middle of the night for Ramadan meals, millions tune in to a TV talent show aimed at finding the country’s next top preachers, by Hariz Baharudin in the Straits Times.
“The deaths of the children in Minab cannot change the course of geopolitics. But the event serves as a reminder that behind every legal debate and every strategic argument lie concrete lives.” Pham Quy, a retired Vietnamese colonel, writes about how international law might apply to U.S. strikes on Iran in VnExpress International.
As global tensions rise, Southeast Asia must try to safeguard its status as a nuclear weapons-free zone, argues Brendan Taylor in the Interpreter.
In Focus: Vietnam Sets Its Sights on AI
Vietnam is angling to become a leader in artificial intelligence in Southeast Asia.
At the start of the month, Vietnam became the third jurisdiction in the world—after South Korea and the European Union—to implement a law regulating AI.
And on March 6, a deal was struck between Viettel, a powerful military-run telecoms conglomerate, and Qualcomm, a U.S. semiconductor chipmaker, to produce an AI-powered smartphone.
Both events offer interesting insights into how the Vietnamese government views this rapidly developing technology.
The AI smartphone deal is part-and-parcel of Vietnam’s push for breakneck growth, with a growing emphasis on developing high-tech sectors. The government has already seen success in attracting semiconductor manufacturing.
Qualcomm has struck another prominent partnership, with national champion conglomerate Vingroup. Last year, it bought a stake in Vingroup subsidiary AI company Movian AI, and it recently announced a partnership to build robots with the technology.
Regarding the new law, part of the impetus is to help develop the AI ecosystem by providing regulatory clarity. A few days after the law came into force, Vietnam also announced that it will establish a national AI development fund.
The law also gives us a sense of the government’s other priorities. The framework of the law is modeled on the EU’s. AI models are categorized as high-risk, medium-risk, and low-risk, with different levels of restrictions imposed on each category. Some activities are prohibited.
But there are some interesting differences between the EU and Vietnamese laws.
Both the EU and Vietnam ban use of AI to deliberately and maliciously deceive people. This means that in Vietnam, AI-generated images must be clearly identified as such, and AI chatbots need to identify themselves.
However, unlike the EU, Vietnam does not explicitly prohibit the use of AI for social scoring, prediction of individual criminal behavior, emotional recognition in the workplace, or real-time biometric identification.
