The Oil Domino
Issue 39 — Key Developments Across Cambodia, Laos, Myanmar, and Thailand
Editor’s Note
by Mattia Peroni, Lead Editor - Mekong Belt Desk
Energy shocks rarely stay confined to the places where they begin. As conflict around Iran disrupts shipping through the Strait of Hormuz—a corridor that normally carries about one-fifth of global oil supplies—the consequences are already rippling far beyond the Middle East, leaking into Southeast Asia.
In Myanmar, the crisis is unfolding in a fragile political landscape. The junta’s odd–even driving restrictions aim to ration scarce fuel supplies, but they also highlight the growing tension between emergency economic management and mounting public frustration. In Laos, the challenge is more structural. With limited fiscal space and heavy debt burdens, spikes in global fuel prices translate quickly into higher domestic costs and renewed pressure on an already fragile economic recovery. For Thailand, rising prices are testing the resilience of a system heavily dependent on imported energy. Policymakers are increasingly forced to lean on strategic reserves and short-term interventions to cushion the shock.
Meanwhile, Cambodia is confronting a different kind of regional spillover. Its expanding crackdown on scam compounds and drug networks is reshaping the country’s security landscape while testing how far cross-border cooperation can keep pace as criminal networks shift across the Mekong.
Myanmar 🇲🇲
Global Oil Shock Hits Fragile Myanmar
by Myat Moe Kywe
Myanmar’s military authorities have introduced a nationwide odd–even driving restriction in response to a worsening fuel crisis triggered by disruptions in global oil supply following coordinated United States–Israel strikes on Iran.
After the attacks, Iran announced the closure of the Strait of Hormuz, one of the world’s most critical maritime chokepoints, through which roughly 20% of global oil supply passes. The disruption sent oil prices surging and strained supply chains across many import-dependent economies, including Myanmar.
Myanmar imports roughly 90% of its fuel, according to 2024 estimates, making the country particularly vulnerable to global energy shocks. Years of political instability and economic disruption following the 2021 military coup have already weakened the country’s energy system.
In response, the military government announced that private vehicles will only be allowed to operate on specific days depending on their license plate numbers. The rule, which took effect on March 7, allows vehicles with even-numbered plates to drive on even-numbered dates, while vehicles with odd-numbered plates may operate on odd-numbered days.
The Ministry of Information stated that the measure is intended to conserve fuel and stabilize the domestic market. Officials noted that similar rationing systems have been used in other countries during periods of severe energy shortages.
Authorities warned that violators could face legal action, although official penalties have not yet been confirmed. Reports circulating among the public suggest fines of approximately 20,000 kyats and up to one month in detention.
Despite the government’s justification, the policy has been widely mocked by the public, reflecting broader frustration with the military’s economic management since the coup.
The announcement has also fueled speculation about a potential surge in electric vehicle purchases. Electric cars and motorcycles are exempt from the restrictions and can be used daily. Reports from Mandalay suggest EV dealerships have seen a spike in demand.
Critics argue that the exemption may benefit businesses linked to the family of junta leader Senior General Min Aung Hlaing. His son, Aung Pyae Sone, reportedly has stakes in companies importing Chinese BYD electric vehicles, while his daughter, Khin Thiri Thet Mon, is linked to firms importing MG electric cars and operating charging stations.
However, the high cost of EVs, limited charging infrastructure, and frequent electricity shortages mean the transition remains out of reach for most citizens.
As the global energy shock ripples through Myanmar’s already fragile economy, the burden is likely to fall unevenly—hitting ordinary households hardest while creating new opportunities for well-connected elites.
Myat is a senior undergraduate student majoring in Politics, Philosophy, and Economics. She has interned at The Asia Foundation in Washington, D.C., and she has also worked as a summer research assistant at the Centre for Policy and Innovation (CRPI), gaining experience in research and analysis. Her work focuses on civic engagement, gender, youth leadership, and community development.
Lao PDR 🇱🇦
Laos Can’t Catch a Break
by Thipphavanh Virakhom, in Vientiane
Laos was already in a tough spot financially. Then a war thousands of kilometers away made things worse.
On March 6, fuel prices in Laos surged, with diesel jumping by LAK 7,380 per litre—one of the sharpest single-day increases the country has ever recorded. For context, typical price changes range between LAK 80 and 300 per litre. This spike was roughly 25 times larger.
The trigger was escalating conflict in the Middle East. After strikes killed Iran’s Supreme Leader, retaliatory attacks followed and global oil markets reacted with panic. The Strait of Hormuz—a narrow chokepoint carrying roughly one-fifth of the world’s daily oil supply—came under threat. When that route appears unstable, prices spike worldwide. In Laos, the impact arrives almost immediately.
Why so fast? Because Laos imports 97% of its fuel from Thailand, amounting to USD 1.22 billion last year alone. There is almost no buffer between global oil prices and what consumers pay at the pump in Vientiane. As a result, the government has very limited capacity to shield households from sudden price shocks.
This exposes a deeper structural problem. Laos is already burdened by heavy debt. The IMF has repeatedly warned that the country’s debt levels are unsustainable, and a comprehensive restructuring remains underway.
The government now faces a familiar dilemma: subsidize fuel prices to protect households and sink further into debt, or allow prices to rise and risk inflation eroding already strained family budgets. As one economist summarized it bluntly: “Which negative do you want?”
The Middle East conflict thus may be “very impactful on the global economy,” but for a small, landlocked, heavily indebted country, “impactful” hits differently. Larger economies can borrow, subsidize, or absorb the impact. Laos cannot.
The timing is particularly unfortunate. The country just came out of a major Party Congress in January, is preparing to graduate from Least Developed Country status in November, and remains in the middle of a debt restructuring process. Each milestone requires political focus and financial stability.
An external shock like this threatens all three at once.
Laos did not cause this crisis. But it may be among the countries that feel its consequences the most.
Thipphavanh holds a bachelor’s degree in international affairs. She is a governance and development professional specialising in rule of law, access to justice, and gender equality in Lao PDR. Her work focuses on strengthening justice sector institutions, advancing people-centred governance, and promoting gender-responsive systems. With extensive experience in project coordination, monitoring and evaluation, stakeholder engagement, and strategic communications, she has collaborated closely with national institutions and international partners to support inclusive and sustainable development.
Thailand 🇹🇭
Why Thailand Faces Rising Risks from Oil Price Surge Amid US–Iran Tensions
by Satid Sootipunya, in Bangkok
The escalating tensions between the United States and Iran have pushed global oil prices sharply higher, reaching, as of March 8, USD 90–93 per barrel according to WTI and Brent respectively. The primary driver of the surge is the closure of the Strait of Hormuz, a maritime chokepoint through which more than 20% of the world’s crude oil supply passes.
According to a report by Bank of America Global Research, Thailand is the most vulnerable country among its Asian peers due to its heavy reliance on imported oil, which accounts for nearly 6% of the country’s gross domestic product (GDP). More than 58% of Thailand’s oil imports come from the Middle East, particularly the United Arab Emirates, Saudi Arabia, Qatar, and Kuwait.
A separate report by Nomura also identifies Thailand as one of the biggest losers from the current oil-price shock due to its high level of import dependence. The analysis estimates that every 10% increase in oil prices could widen Thailand’s current account deficit by roughly 0.5% of GDP.
However, Deputy Prime Minister and Transport Minister Phiphat Ratchakitprakarn has sought to reassure the public, stating that Thailand currently holds strategic reserves sufficient for more than 90 days—even in a scenario where oil imports from the Middle East are completely disrupted.
To mitigate potential shortages, Deputy Prime Minister and Finance Minister Ekniti Nitithanpraphas has introduced three urgent measures. These include temporarily restricting exports to certain countries, with exceptions for Laos and Myanmar; increasing the oil reserve requirement for retailers from 1–1.5% to 3% starting in April; and requiring gas stations not to hoard supplies while limiting the volume of fuel individuals can purchase.
Satid is a multimedia economic journalist and news anchor who covers macroeconomic trends, Thailand’s fiscal policy, and key regional developments for Bangkok Biz. A Journalism graduate from Thammasat University, he has reported on major issues such as the US–China trade tensions, the Myanmar crisis, and global corporate stories, drawing on prior newsroom experience at The Momentum, the Bangkok Post, AFP, and Varasarn Press. His work blends economic analysis, foreign affairs, and digital storytelling, with a strong focus on making complex financial and political topics accessible to Thai audiences.
Cambodia 🇰🇭
Cambodia’s Scam Crackdown Tests The Region’s Collective Resilience
by Sokna Thea, in Phnom Penh
Cambodia has launched an intensive crackdown on transnational cybercrime and narcotics networks, shutting down more than 200 sites and prompting the departure of roughly 240,000 foreign nationals. While authorities aim to eliminate these syndicates by April 2026 to restore investor confidence, international observers warn that rapid closures may leave thousands of trafficked victims without support.
According to Cambodia’s Ministry of Interior, the campaign against technology-enabled fraud has significantly altered the country’s demographic and security landscape. Interior Minister Sar Sokha confirmed that more than 210,000 foreign nationals left the country voluntarily during the operation, which intensified in early 2026. An additional 30,000 individuals were arrested and deported.
The scale of the crackdown is considerable. As of late February 2026, authorities had closed 113 licensed casinos and 136 suspected illegal facilities believed to be used as bases for online scam operations. The effort comes after years of international scrutiny over the rise of autonomous scam compounds in Sihanoukville and border regions.
Parallel efforts have targeted drug trafficking. The National Authority for Combating Drugs (NACD) reported that security forces handled 10,743 drug-related cases in 2025, leading to 27,884 arrests.
Although the quantity of finished narcotics seized declined, authorities confiscated a record 42.8 tonnes of chemical precursors. Experts believe this reflects a shift toward domestic drug manufacturing within the Golden Triangle supply chain, prompting Cambodian authorities to focus more heavily on intercepting raw materials before they reach industrial-scale laboratories.
Human rights organizations, however, have identified gaps in the current strategy. Rapid closures often fail to distinguish between perpetrators and victims of trafficking who were coerced into participating in scam operations.
Observers also warn that the departure of 240,000 foreigners could produce economic side effects. Former scam hubs may face declining real estate demand and reduced commercial activity as local businesses lose a large—if illicit—consumer base.
As Cambodia aggressively dismantles these networks, there is significant concern regarding the “balloon effect,” where criminal syndicates may relocate to less-monitored countries in the region. Cambodia’s success or failure serves as a critical bellwether for regional security cooperation and the collective effort to protect ASEAN citizens from the growing epidemic of cross-border human trafficking and cyber-slavery.
Authorities argue the measures are necessary to restore national sovereignty and rebuild investor confidence. The April 2026 deadline will serve as a key benchmark for whether Cambodia can transition from a hub of transnational crime to a more secure destination for legitimate foreign investment.
Sokna has a background in International Affairs and Business & Commercial Law. He’s currently a Senior Project Coordinator at the Ministry of Economy and Finance of Cambodia, working on the Financial Management Information System (FMIS) Project. His professional focus is driven by entrepreneurship, business development, and financial technology, with a particular interest in how private-sector innovation drives Cambodia’s economic growth.
Editorial Deadline 07/03/2026 11:59 PM (UTC +8)
