International Oil Prices Surge
International oil prices have risen sharply due to ongoing conflicts in the Middle East. Brent crude prices averaged about 60% higher in September 2026 compared to February 2026. This rise is contributing to inflation and cost-of-living pressures across the ASEAN+3 region. This region includes ASEAN members, along with China, Japan, and South Korea, according to the Business Times.
Governments in the region face pressure to protect households and businesses from rising energy costs. However, past economic shocks, including the Covid-19 pandemic and inflation after the war in Ukraine, have left many governments with high public debt and limited financial capacity. The need for targeted support is becoming urgent. Population ageing and the shift to cleaner energy sources add to these challenges.
The report stresses that the focus should be on protecting the most vulnerable populations. Broad price controls can distort market signals. For example, energy subsidies in Thailand for fiscal year 2024 are projected to cost the government about 0.6% of GDP. Instead, measures like temporary cash transfers and consumption vouchers have been suggested. These would help sustain household purchasing power while supporting domestic demand. The approach varies by country based on local economic conditions.
The rise in energy prices is likely to affect sectors that rely on oil, especially transportation and manufacturing. This could lead to higher operational costs. Investors may see more volatility in energy stocks and commodities as governments respond to these pressures.
Watch for upcoming policy announcements from ASEAN+3 governments. These will address energy support measures and fiscal strategies to tackle inflationary pressures.
Based on reporting by: businesstimes.com.sg