TAIWAN-WAR-IRAN-US-ISRAEL-OIL
A diagram illustrating Taiwan's energy storage and transportation facilities. The Ministry of Economic Affairs stated that through alternative sourcing, fuel allocation, and advance planning for future imports, Taiwan's oil and gas supply is expected to remain stable until the end of the year; international energy prices and shipping conditions remain important factors affecting supply stability.

As the conflict in the Middle East drives up international energy prices and concerns persist over shipping and fuel supplies, the Ministry of Economic Affairs (MOEA) said Taiwan’s oil and gas supplies are currently expected to remain adequate through the end of the year. Procurement for the first quarter of 2027 has also begun ahead of schedule. The government is meanwhile calling for support for an additional budget to help stabilize energy supplies and prices.

According to an Oct. 18 report by the Central News Agency, the MOEA said international fuel prices have risen since the US-Iran conflict broke out, while some shipping services and transport arrangements have been affected. CPC Corp., Taiwan and Taipower have continued adjusting energy procurement, shipping schedules and fuel allocation. The government said supplies are currently secure through the end of the year.

To reduce reliance on energy sources and shipping routes in the Middle East, CPC is actively seeking alternative oil and gas supplies from the United States, Africa and other regions, the MOEA said. It has also begun planning procurement for the first quarter of next year. The government hopes that diversifying import sources, closely managing shipping schedules and maintaining inventories will help limit the impact of changes in the international situation on Taiwan’s energy supply.

On energy prices, the MOEA said international Brent crude prices have risen sharply since the conflict began compared with before the war. The government has used price stabilization measures to moderate the extent to which higher costs are passed on to households and businesses. The MOEA said increases in gasoline and diesel prices in Taiwan have been lower than those in some neighboring economies, while electricity rates have not been adjusted accordingly.

However, the price stabilization measures have also placed financial pressure on CPC and Taipower as they absorb part of the higher costs. The MOEA is therefore calling for support for an additional budget to help state-owned enterprises and related industries cope with fluctuations in fuel costs, avoid sharp short-term increases in energy prices, and limit the impact on household consumption and business operations.

On electricity supply, the MOEA said Taiwan is not currently facing a power shortage. However, the rapid growth of the semiconductor industry and AI data centers means that electricity demand could continue to rise. The government has reviewed electricity supply and demand over the next decade and plans to add gas-fired generating units to support demand and maintain a stable power supply during the energy transition.

The MOEA also said the government would not rule out any energy option and would continue to assess nuclear power carefully. Related decisions must take into account technological maturity, nuclear waste management and the level of public support, it said.

For Taiwan, energy security affects not only household fuel supplies and electricity prices but also the long-term development of semiconductors, AI data centers and manufacturing. Finding a balance among supply stability, affordability, the finances of state-owned enterprises and emissions-reduction targets remains a policy challenge for the government.

The MOEA’s assessment that supplies are “secure” is based on current procurement, inventory and allocation arrangements. Conditions could still be affected by developments in the Middle East, shipping conditions and changes in international prices. Energy supplies and price trends will require continued monitoring.