Wed, Jun 25, 2025 page8

• Hormuz issue shows energy crisis

  • By Harun Talha Ayanoglu
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  Over the weekend, a confrontation in the Middle East escalated.

  Iran and Israel, after years of indirect engagements, are openly attacking each other with drones, missiles and airstrikes because of Iran’s nuclear program, which is viewed by Israel as an existential threat and by the US as a serious challenge to regional stability.

  The 2015 nuclear agreement, once hailed as a breakthrough, aimed to curb Iran’s uranium enrichment in exchange for lifting international sanctions.

  However, in 2018, US President Donald Trump’s first administration withdrew the US from the deal, seeking a more restrictive framework on Iran’s nuclear ambitions and regional influence.

  Israel, on the other hand, had opposed the original deal from the beginning, saying it gave Iran room to maneuver while legitimizing its nuclear infrastructure.

  As diplomacy deadlocked and Iran’s program advanced, military escalation has become a central instrument for both sides. Eventually, on Sunday, US B-2s targeted underground nuclear facilities with bunker buster munitions deep inside Iran.

  In response, the Iranian parliament voted to close the Strait of Hormuz, a key artery through which one-third of global seaborne oil passes. That decision still awaits final approval from supreme leader Ayatollah Ali Khamenei. If enforced, even a partial closure of the strait could trigger dramatic increases in global energy prices, disrupting everything from fuel markets to the broader cost of living.

  What does this mean for those living on the other side of Asia and why are its implications serious?

  Taiwan’s status as a high-tech hub comes with enormous energy demands and any shock to global energy markets threatens to ripple quickly through its economy.

  The Strait of Hormuz might look remote on a map, but it is a vital artery in Taiwan’s energy lifeline. According to the Bureau of Energy, 61 percent of Taiwan’s imported crude oil comes from Gulf states such as Saudi Arabia, Kuwait, the United Arab Emirates, Iraq and Qatar. Additionally, nearly one-third of its liquefied natural gas imports are sourced from Qatar alone.

  Whether from a full blockade, surges in insurance costs or rerouted tankers, any disruption in these flows would not only affect fuel prices, but could hit Taiwan’s entire economic foundation.

  That vulnerability has only deepened with the shutdown of Taiwan’s last nuclear reactor at the Ma-anshan Nuclear Power Plant on May 17. Once a stable and domestically controlled source of low-emissions baseload power, nuclear energy now plays no part in Taiwan’s operating capacity.

  Meanwhile, renewables have not filled the gap. The share of renewables sits at about 12 percent, well below the government’s 20 percent target for this year.

  With nuclear gone and green energy lagging, fossil fuels have taken over, increasing Taiwan’s exposure to price volatility and geopolitical risks.

  Energy is not just about electricity — it is about the basic functioning of society. It powers farms, factories, data centers and homes. In Taiwan’s case, it powers the world’s most advanced chip foundries, the backbone of global digital infrastructure. It keeps artificial intelligence server farms humming and assembly lines moving. If energy prices spike, so does the cost of production and the pressure on public budgets.

  Even if Taiwan avoids direct supply cuts, the global rush to secure alternative fuel sources would drive up prices. For a government already navigating complex energy reforms, a surge in costs could delay renewable investment, deepen budget strains and intensify domestic dissatisfaction.

  This is a clear warning that energy strategy must be grounded in reality, not just idealism. Taiwan’s reliance on imported fossil fuels, combined with the shutdown of its last nuclear reactor and a slow transition to renewables, leaves it vulnerable to external shocks beyond its control. The potential implications of a disruption in the Strait of Hormuz demonstrate how exposed Taiwan’s energy security is to global events.

  In this light, energy policy cannot be treated as a symbolic political contest between clean-energy ambitions and nuclear skepticism. It must be approached with clear-eyed pragmatism. Taiwan needs a diversified energy portfolio, secure and long-term supply agreements, investments in grid flexibility and a serious, nonideological conversation about the future of nuclear energy. None of these solutions is perfect on its own, but together, they build resilience.

  In a world in which energy routes can be blocked overnight and fuel prices can fluctuate wildly with global events, Taiwan’s economic stability and, naturally, its national security, depend on getting this right. Energy security is not just an environmental or economic goal. It is the foundation of everything else.

  Harun Talha Ayanoglu is a research associate at the Taiwan Center for Security Studies.
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