By Kanni Wignaraja and Munkhtuya Altangerel
When conflict in the Middle East disrupts global fuel markets, the shock reaches the Pacific late, and it does not leave quickly. Fuel and food prices rise once the disruption catches up with the region, and then stay elevated long after the initial shock has passed elsewhere.
Outside Australia and New Zealand, oil accounts for around 80 percent of the region’s total energy supply, and almost all of it is imported. Most of that fuel reaches Pacific shores after it has passed through refineries in East Asia, which themselves depend heavily on crude shipped through the Strait of Hormuz. That causes a supply lag, but not a price lag.
A shock at the source travels through a chokepoint, a refinery, and a shipping route before it reaches a fuel depot in Nuku’alofa or Tarawa, and by the time it does, the anticipation of future stock-outs already has fuel prices rising. And when new supplies do reach these islands, the rest of the world’s attention has often already moved on to the next story.
In April, Pacific Islands Forum leaders invoked the Biketawa Declaration, the region’s highest-level crisis response mechanism. This was first established in 2000 to handle security emergencies, not energy shocks.
Tuvalu and the Marshall Islands declared energy emergencies of their own. Several countries, including Solomon Islands, Fiji, Nauru, Vanuatu, the Cook Islands and the Federated States of Micronesia, passed a series of national response measures.
By May, Forum Foreign Ministers had endorsed a regional response mechanism and established a taskforce to track the fallout across fuel stocks, and the shipping and aviation industries. That was not an overreaction. It is what happens when a region with almost no buffer against imported fuel volatility watches the ground shift beneath it, in real time, with some economies, including Tonga, the Cook Islands and Tuvalu, holding little more than a month’s fuel supply in reserve even before this year’s shock hit.
The commentary on the Middle East crisis has understandably focused on the conflict itself and on the economies with the deepest direct exposure to it. What tends to get missed is the lag effect on these smaller economies at the end of the global supply chain.
The region’s fuel import bill already runs to roughly six billion US dollars a year, and in individual Pacific economies that can mean anywhere from five to twenty five percent of GDP. And this is simply to keep the lights on and the boats running, even before a crisis hits. Analysts at Zero Carbon Analytics tracking this year’s disruption estimate Vanuatu’s import costs alone could rise by well over a hundred million dollars, and Tonga’s by tens of millions more, figures that represent a significant share of each country’s total GDP.
Months after the crisis fades from global coverage, Pacific governments and households will still be absorbing costs that keep them locked into a vulnerability of exogenous exposure that, today, is largely outside their control.
This is why energy security cannot be treated as a secondary concern. Rather, it is closely intertwined with climate resilience, economic security and human development progress.
Energy independence
A Pacific economy that generates much of its own power from the sun, winds and geothermal resources is not as exposed to a fuel shock ten thousand kilometers away. UNDP‘s analysis with Australia’s University of New South Wales, suggests that replacing diesel generation with solar power and adequate battery storage across the region could save well over US$400 million per year once the upfront investment is made. These are savings that could be spent on new infrastructure or upgrades to existing infrastructure and social< services, instead of the large extra spend on fuel every time a war half the world away drives prices up.
Energy independence is not just an emissions target. It is protection against the kind of external shock the region has just lived through, and will live through again, while the region’s energy exposure remains high.
The moment calls for accelerating the Pacific’s energy transition. This can be presented with a collective intent and determination at pre-COP and COP31. The message and means would resonate not only as climate ambition sitting alongside other worthy climate-related goals, but also as fundamental economic sovereignty.
Renewable energy programmes are well underway across the region, and these go beyond decarbonisation goals. In Vanuatu, the Government, Japan and UNDP are advancing a whole-of-island energy transition through the green transformation of Pentecost Island, where 24-hour renewable power now reaches remote settlements and local youth are gaining certified green energy skills. In Fiji, the Government and partners such as Australia, New Zealand, and the United Kingdom are backing the ambition to electrify hundreds of rural and maritime communities. These are not just infrastructure investments; they are a direct insurance policy against external shocks, while helping build the Pacific workforce needed to sustain the transition.
The headline numbers may appear modest by global standards, but in small island contexts they are transformative. On Pentecost Island renewable, reliable 24-hour electricity has been switched on for 26 settlements, reaching approximately 16 percent of the island’s population while creating new opportunities for young ni-Vanuatu to participate in the renewable energy workforce.
For those communities, the impact is not measured in megawatts, but in functioning health facilities, children studying after dark, reduced fuel dependence, uninterrupted livelihoods, and greater household resilience when external shocks disrupt supply chains or drive up energy costs.
The Pacific did not create the conditions behind this year’s fuel shock. What the region can control is how it responds to reduce exposure to the next one. An accelerated energy transition is the only version of energy security that does not depend on someone else’s war and someone else’s timeline.
—
Kanni Wignaraja is UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific and Munkhtuya Altangerel is the Resident Representative of UNDP’s Pacific Office in Fiji.
