Vietnam races to cut Gulf energy dependence by 2040 with bold reforms
Vietnam's reliance on energy imports from the Persian Gulf has grown sharply in recent years. By 2025, over a quarter of its natural gas supply will come from the region, up from just 10% in 2020. The shift stems from rising demand and shrinking domestic production, pushing the government to take action.
The country now imports 88% of its crude oil and 49% of its natural gas from Gulf nations. This dependence places Vietnam among the most exposed in Southeast Asia, though less so than the Philippines, which sources 95% of its crude from the same region. Neighbours like Malaysia (69%), Thailand (59%), and Singapore (52%) also rely heavily on Gulf oil, while Indonesia remains less dependent, with only 20% of its crude imports coming from there.
Vietnam's government has rolled out measures to cut this reliance. The Power Development Plan VIII (PDP8), approved in 2023, includes expanding LNG terminals such as Thi Vai and Cai Mep. It also boosts offshore gas exploration and sets renewable energy targets of 30-40% by 2030. Additional incentives for domestic gas projects aim to reduce import dependence by 2040.
Beyond gas, Vietnam is seeking support from Japan and South Korea to secure alternative crude oil supplies. The move reflects broader regional concerns about supply disruptions. Thailand, for instance, maintains the longest oil reserve buffer at 95 days, offering some protection against shortages. Meanwhile, Singapore, Indonesia, and Thailand also import significant amounts of diesel and fertilisers from the Gulf, with Singapore's diesel dependence at 16%.
Vietnam's energy strategy now balances short-term import needs with long-term domestic and renewable investments. The country's heavy reliance on Gulf gas and oil remains a challenge, but planned infrastructure and policy shifts aim to ease this by the next decade. Success will depend on both regional cooperation and the pace of domestic energy developments.
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