The International Energy Agency (IEA) has highlighted the growing challenge posed by the concentration of clean energy supply chains in a limited number of countries, particularly as Southeast Asia experiences rapidly increasing electricity demand. Speaking at the Singapore International Energy Week on Tuesday, IEA Executive Director Fatih Birol emphasized that the region’s rising dependence on electricity amid accelerating industrialization and electrification makes energy security and diversification of supply chains more critical than ever.

Birol noted that while traditional energy sources such as oil, natural gas, and liquefied natural gas (LNG) continue to play a role, electricity demand across the Association of Southeast Asian Nations (ASEAN) is expanding at twice the rate of overall energy consumption. This surge is driven by greater industrial electrification, increased use of air conditioning, the adoption of electric vehicles (EVs), and growth in data centers. He added that Southeast Asia has become a significant market for clean energy technologies, with countries in the region investing over $20 billion in Chinese-made clean energy products in 2026 alone, according to data from the energy think tank Ember. Although Birol did not specify which countries dominate clean energy supply chains, China remains the primary global supplier of renewable energy equipment, including solar panels, wind turbines, EVs, and batteries.

Birol also pointed to escalating geopolitical tensions as a key factor reshaping the global energy landscape. He described the current environment as unprecedented in his professional experience, with geopolitics casting a deep and extended shadow over energy markets. These developments have heightened concerns about supply disruptions, price volatility, and long-term energy security, with Birol projecting that geopolitical influence on energy supply and consumption will only intensify.

The ongoing conflict in the Middle East has particularly accelerated shifts in energy consumption patterns. Birol observed that the crisis has spurred increased investment in alternative energy sources such as solar, coal, and nuclear power, alongside a significant rise in EV adoption worldwide. He reported a 60% increase in global EV sales outside China over the past eight months compared to prior trends, underscoring growing consumer demand for cleaner transportation options.

The surge in EV sales and alternative energy investments corresponds with sharp increases in fossil fuel prices since the outbreak of the US-Israeli conflict involving Iran. Diesel prices have risen roughly 200% from pre-war levels, while LNG prices have jumped about 250%, placing additional pressure on consumers and industries and incentivizing a shift toward cleaner energy sources.

Earlier at the same conference on Monday, Birol cautioned that global energy markets were unlikely to revert to pre-conflict conditions in 2027. He suggested that the changes spurred by the conflict could result in lasting transformations in energy consumption, investment strategies, and supply chain structures worldwide.