BANGKOK (AP) — The war in Iran has exposed major risks for Southeast Asia that could cost the region many billions of dollars if it does not diversify sources of energy more quickly, according to an International Energy Agency report released Tuesday.
An overreliance on oil and gas transported through the Strait of Hormuz left the region particularly vulnerable to shocks from the Iran war, a "stark wake-up call" for its energy security, the report says.
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FILE - This aerial view on Jan. 19, 2025, shows the Bataan Nuclear Power Plant in the Philippines, which has never produced a single watt of energy. (AP Photo/Anton L. Delgado, File)
FILE - A group of workers installs solar panels on the roof of a warehouse near Jurong Island in Singapore on Oct. 6, 2025. (AP Photo/Anton L. Delgado, File)
FILE - A pair of solar installers haul a solar panel onto the roof of a home in Manila, Philippines, on April 30, 2026. (AP Photo/Anton L. Delgado, File)
FILE - A boy fishes in front of the Bangchak Oil Refinery, home to Thailand's newest sustainable aviation fuel facility, in Bangkok on Jan. 3, 2026. (AP Photo/Anton L. Delgado, File)
FILE - A motorcyclist drives past the South Luzon Thermal Energy Power Plant in Calaca, Batangas, in the Philippines on Oct. 4, 2025. (AP Photo/Anton L. Delgado, File)
It notes that rising sales of electric vehicles, a renewed interest in nuclear power and a boom in rooftop solar and other renewable energy installations show the war is spurring change.
But more sweeping reforms are needed. Otherwise, Southeast Asia’s energy import bill could rise to $245 billion by 2035, tripling from $80 billion in 2024, the report warns.
“Diversification of energy sources and supply routes is now a central priority," said Fatih Birol, the IEA executive director.
The energy shock sent Southeast Asia into a state of energy triage, leading to higher energy bills and rising inflation.
In a likely setback for efforts to phase out dependence on fossil fuels, the conflict has reinforced the need to rely on coal during times of energy crisis, the IEA said.
The war is also furthering plans for nuclear power in Southeast Asia, but years-long construction and regulatory processes remain. Indonesia, Vietnam and the Philippines may be the furthest along with nuclear power plans, but their timelines are uncertain.
“The IEA report clearly highlights that Southeast Asia is at a crossroads,” said Sam Reynolds of the U.S.-based Institute for Energy Economics and Financial Analysis.
In the Philippines, which declared a national energy emergency, consumers have turned to rooftop solar at record rates, as a quick, do-it-yourself solution to rising utility bills.
“This is the first time I’ve seen a demand shock of this magnitude," said Ivan Cano with the Manila-based solar company EcoSolutions.
The Philippines became the second-largest destination for Chinese solar exports in the first quarter of 2026, the IEA found. Imports were around three times higher than the same period last year.
Consumers have also driven a shift in Southeast Asia's transportation industry.
Electric vehicle sales more than doubled in 2025 to around half a million units, according to the IEA, which found that one in five cars sold regionally is electric.
Last month, Laos banned the import of fuel-powered vehicles for the rest of 2026 to cut oil imports and encourage the shift to EVs.
Despite the tentative deal to end the Iran war, fossil fuel prices will likely remain high which means “we will see a push towards more ambitious clean energy deployment,” said Reynolds with IEEFA.
To overcome its weaknesses, Southeast Asia needs to reduce its overall demand for imported fossil fuels, the IEA said.
It suggests making national grids more efficient and boosting investment in all forms of renewable energy, such as solar, wind, hydro and geothermal power.
“The Middle East conflict is both a stress test of Southeast Asia’s current energy system and a catalyst to accelerate structural change,” the report stated.
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FILE - This aerial view on Jan. 19, 2025, shows the Bataan Nuclear Power Plant in the Philippines, which has never produced a single watt of energy. (AP Photo/Anton L. Delgado, File)
FILE - A group of workers installs solar panels on the roof of a warehouse near Jurong Island in Singapore on Oct. 6, 2025. (AP Photo/Anton L. Delgado, File)
FILE - A pair of solar installers haul a solar panel onto the roof of a home in Manila, Philippines, on April 30, 2026. (AP Photo/Anton L. Delgado, File)
FILE - A boy fishes in front of the Bangchak Oil Refinery, home to Thailand's newest sustainable aviation fuel facility, in Bangkok on Jan. 3, 2026. (AP Photo/Anton L. Delgado, File)
FILE - A motorcyclist drives past the South Luzon Thermal Energy Power Plant in Calaca, Batangas, in the Philippines on Oct. 4, 2025. (AP Photo/Anton L. Delgado, File)
Leaders of the Group of Seven are discussing Russia's war in Ukraine along with a tentative deal struck by U.S. President Donald Trump to end the conflict with Iran as they meet for the first full day at the G7 summit of leading industrialized nations on Tuesday in the French town of Evian-les-Bains.
Trump said he would focus again on Ukraine following a bilateral meeting with French President Emmanuel Macron shortly after arriving late Monday in the lakeside spa town.
“Now that this (Iran) is finished, we’re going to be focusing on that,” Trump said.
Macron said he will seek to persuade Trump to continue supporting Ukraine and increase pressure on Russia to help reach a peace agreement more than four years after Russian President Vladimir Putin launched the war. Trump said he had good conversations on Sunday with Putin and Ukrainian President Volodymyr Zelenskyy, who is attending the summit at France’s invitation.
The leaders also will have a working session focused on ending crises and ensuring stability in the Middle East. They are expected to discuss the global economic crisis resulting from the war and the closure of the Strait of Hormuz. Egypt, Qatar and the United Arab Emirates will join the talks.
Shortly before his arrival, Trump announced an agreement to end the 3 1/2-month-old U.S. war against Iran.
The G7 includes France, the United States, Canada, Germany, Italy, Japan and the United Kingdom. Guest nations at this summit include Brazil, Egypt, India, Kenya, South Korea, Qatar, Ukraine and the UAE.
Here is the latest:
The U.S. is “not investing any money in Iran,” Trump said.
“That rumor got out there yesterday, it was ridiculous,” he told reporters. “We have no obligation to invest any money in Iran.”
The president made the comment a day after senior U.S. officials told reporters that a memorandum of understanding includes a $300 billion fund to help rebuild if Tehran meets certain benchmarks.
Trump denied the claim twice on Tuesday during a bilateral meeting with the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani.
Trump said he is “not happy with the way Israel has handled themselves with Lebanon and with Hezbollah.”
“They should have been able to deal with them faster,” Trump told reporters in reference to Israeli operations to target Iran-backed Hezbollah militants in Lebanon.
“It just goes on forever. And when that happens, it throws a negative light on the big deal. And that’s the deal with Iran,” he said.
The U.S. president said he wants to focus on Ukraine, adding that the issue of Iran will soon be “back in the rear view mirror.”
Trump, who said he will meet with Zelenskyy for further talks, downplayed the impact of Russia’s war in Ukraine on the U.S., but lamented the death toll.
“The whole thing is ridiculous,” Trump said. “So, yeah, I’m going to do whatever I can.”
Trump and Sheikh Tamim have much to discuss with the U.S. and Iran expected to formally sign a ceasefire settlement later this week and open up negotiations about Tehran’s nuclear program.
“You’ll always be my friend,” Trump said at the start of the bilateral meeting.
The emir in turned thanked Trump for his leadership, adding that the ceasefire agreement between the U.S. and Iran “is a very important deal” but much work remains to be done.
The desert peninsula of Qatar was shaken by the three-month Iran war.
Iranian strikes caused billions of dollars in damage to Qatar’s critical energy infrastructure. Experts estimate it will take three to five years to repair liquefied natural gas pipelines that were damaged by strikes.
Trump and other leaders of the G7 gathered with Ukraine’s President Volodymyr Zelenskyy for an hour and 15 minutes Tuesday morning at the summit in Evian-les-Bains.
The talks focused on how to “build peace and security for Ukraine and Europe,” the French organizers of the summit said.
Macron and Zelenskyy took a little walk through the wooded garden at the Hotel Royal as they held bilateral talks before joining other G7 leaders.
French organizers of the G7 summit in the resort town of Evian-les-Bains placed Ukraine high on the agenda during efforts to end the war more than four years after Russia’s full-scale invasion.
Macron said he would urge Trump to maintain U.S. support for Ukraine and increase pressure on Russia to help secure a peace agreement.
“The right negotiation is one with Ukraine and Russia at the table, with Europeans and Americans also present,” Macron said Monday.
German Chancellor Friedrich Merz, who has had a frosty relationship with Trump, gave the U.S. president a soccer jersey with Trump’s name and the number 47 on the back.
Merz approached with the jersey as Trump sat down at a conference table for a working session. Trump smiled and held it up for a photo.
The white jersey appeared to be the same one the German national team is wearing in the ongoing World Cup.
Merz and Trump exchanged barbs earlier this year after Merz said the U.S. was being “humiliated” by Iran and criticized the U.S. for going into the war without any strategy.
Trump later said Merz “should spend more time on ending the war with Russia/Ukraine” and “fixing his broken Country, especially Immigration and Energy.”
Trump is scheduled to host one-on-one talks with the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, and United Arab Emirates President Mohammed bin Zayed Al Nahyan later in the morning.
The Gulf nations are not part of the G7, but Macron extended invitations to the leaders to take part in the summit at a fraught moment for the region.
G7 leaders also will convene a working lunch to discuss the situation in the Middle East, where the conversation is expected to focus on the path ahead after the ceasefire agreement between the U.S. and Iran.
Britain has announced a new set of sanctions targeting the “shadow fleet” Russia uses to ship oil and gas and the finance networks used by Moscow to evade Western sanctions.
The sanctioned ships include several vessels recently purchased by Russia to ship liquefied natural gas from its sanctioned Arctic LNG 2 project.
Britain says it has now sanctioned more than 600 shadow fleet vessels.
U.K. troops seized a Russian shadow fleet vessel in the English Channel for the first time last weekend.
The sanctions were announced as Prime Minister Keir Starmer attends the G7 summit in France. He is due to meet Ukraine’s President Volodymyr Zelenskyy on Tuesday.
Zelenskyy is getting some time for private talks with Macron before he is scheduled to meet with the other G7 leaders, according to the French government.
Five of the seven leaders, representing Britain, Canada, Germany, Italy and Japan, were huddled in conversation with European Commission President Ursula von der Leyen before the start of the first session on Ukraine.
Trump was missing. Macron, too, hadn’t arrived yet because he was with Zelenskyy.
Ukrainian President Volodymyr Zelensky was welcomed by French President Emmanuel Macron ahead of the morning working session with G7 leaders to discuss the ongoing Russian war against Ukraine.
Qatar's Emir Sheikh Tamim bin Hamad Al Thani arrives at the Hotel Royal for a G7 Summit in Evian-les-Bains, France, Tuesday, June 16, 2026. (Yoan Valat/Pool Photo via AP)
French President Emmanuel Macron, right, walks with Ukrainian President Volodymyr Zelenskyy at the Hotel Royal for the G7 Summit in Evian-les-Bains, France, Tuesday, June 16, 2026. (Yoan Valat/Pool Photo via AP)
From left, Japan's Prime Minister Sanae Takaichi, European Commission President Ursula von der Leyen, U.S. President Donald Trump, French President Emmanuel Macron and Ukrainian President Volodymyr Zelenskyy during a working session at the G7 summit in Evian-les-Bains, France, Tuesday, June 16, 2026. (AP Photo/Thibault Camus, Pool)
From left, U.S. President Donald Trump, French President Emmanuel Macron and Ukrainian President Volodymyr Zelenskyy during a working session at the G7 summit in Evian-les-Bains, France, Tuesday, June 16, 2026. (AP Photo/Thibault Camus, Pool)
President Donald Trump boards Air Force One, Monday, June 15, 2026, at Joint Base Andrews, Md. (AP Photo/Julia Demaree Nikhinson)
French President Emmanuel Macron waves from a car leaving after meeting security forces ahead of G7 summit in Evian-les-Bains, France, Monday, June 15, 2026. (AP Photo/Christophe Ena)
President Donald Trump waves as he boards Air Force One, Monday, June 15, 2026, at Joint Base Andrews, Md. (AP Photo/Julia Demaree Nikhinson)
U.S. President Donald Trump talks as he greets France's President Emmanuel Macron and first lady Brigitte Macron at the G7 summit, Monday, June 15, 2026, in Evian-les-Bains, France. (AP Photo/Julia Demaree Nikhinson)
