Global Oil Shock and Myanmar’s Energy Security 

Photo – AFP

This On Point (OP2026-01) was published on March 12, 2026, as an English translation of the original Burmese version released on March 10, 2026.

What Would an Oil Shortage Mean for Myanmar?

▪️Events

As a war involving the United States, Israel, and Iran ripples across the Middle East, the resulting oil shock is reaching Myanmar, too. The State Security and Peace Commission (SSPC) has responded with fuel-saving measures, including an odd–even driving rule—vehicles with even-numbered plates may drive only on even days, and odd-numbered plates only on odd days. It has also banned fuel hoarding and warned against selling petrol at inflated prices. Junta officials claim the country holds a 40-day fuel reserve, and that two vessels have already docked, with 14 more reportedly purchased and due to arrive.

▪️Preliminary Analysis

Myanmar’s energy security is so vulnerable that it can be easily compromised. Oil and petroleum products are essential imports for Myanmar, and according to 2023 data, one-third of the total import volume is fuel [see ISP Data Matters (ISP-DM2026-021)]. Furthermore, Myanmar is heavily reliant on foreign countries for its fuel needs, particularly refined products [see ISP Data Matters (ISP-DM2026-022)]. Around 95 percent¹ of total fuel demand is met through imports, while domestic production accounts for only about five percent. This heavy reliance on imports for such a basic commodity poses a major risk for Myanmar. Any shock in the global oil supply chain could quickly choke the country’s fuel supply.

More worrying still, the refineries that supply Myanmar depend heavily on crude oil from the Gulf—especially Saudi Arabia, the UAE, Kuwait, and Iraq. Singapore, Myanmar’s largest supplier, is a case in point: around 70 percent of its crude imports come from the Middle East.

On the other hand, Myanmar’s domestic oil refining capacity is very low. According to data known up to 2019, nearly six million tons (5,937,000 tons) of fuel were consumed annually nationwide, but domestic production was only over 176,000 tons. Domestic production meets only three percent of Myanmar’s fuel demand. Strategic reserves cover just around 40 days of consumption, far short of the 60–90 days widely recommended for energy security. Petrol and diesel—the lifeblood of transport and agriculture—therefore sit on dangerously thin reserves, leaving the country exposed to any disruption in supply.

▪️Scenario Forecast

If the global oil supply chain were disrupted, Myanmar would quickly face fuel shortages and surging prices. That would come on top of an already severe mix of socioeconomic distress, high inflation and ongoing armed conflict. Fuel already accounts for roughly one-third of the country’s imports. If prices were to rise by 30–50 percent, the strain on foreign-exchange reserves would be immense, further weakening Myanmar’s ability to import other essential goods. On March 5^th, the Central Bank of Myanmar supplied USD 32 million to oil traders to stabilize supply. A prolonged crisis could further constrain imports of other essential commodities and push inflation even higher. If shortages persist, the effects would ripple across Myanmar’s economic sectors, fuelling public resentment and potentially carrying political consequences.

Transportation and logistics: Myanmar’s strategic reserves of petrol and diesel are reportedly sufficient for only about 40 days. If the inability to procure fuel turns into a prolonged crisis, rationing and restricted sales would likely give way to outright shortages—triggering severe knock-on effects across the economy.

Agriculture: The Gulf is also a major global hub for fertiliser production. Any disruption could hit Myanmar’s fertiliser imports, worth over USD 500 million a year. A serious diesel shortage—critical for agricultural machinery—would pose a direct threat to farm output and, in turn, food security.

Textiles and manufacturing: The garment industry, a major employer, depends heavily on imported synthetic yarns and threads. As transport and energy costs rise, production costs will swell, eroding Myanmar’s competitiveness in international markets. Small and medium-sized manufacturers would face higher cost pressures.

Electricity generation: Fuel-based power generation would come under compounding strain. Natural gas-fired electricity is increasingly the global fallback as other fuels tighten. If reliance on gas rises in the local market, Myanmar could face further pressure from higher gas prices.

To reduce the risk of a severe fuel shortage, Myanmar should track—and adapt—fuel distribution and consumption measures that have worked in neighbouring countries. At the same time, Myanmar will also need to strategically diversify import channels and reduce over-reliance on any single supplier. Finally, if the country is serious about resilience, it will have to expand national strategic energy reserves—urgently, not eventually.

Reference

1. As per the State Security and Peace Commission’s estimates on March 4, 2026, Myanmar consumes around 3.2m gallons of fuel a day, equivalent to roughly 3.8m metric tonnes a year. Data from the International Energy Agency show that Myanmar refined only about 200,000 metric tonnes in 2023, suggesting that domestic production meets just 3–5 percent of total demand. ↩︎