The Taiwan Affairs Office responded to concerns about Taiwan’s petroleum shortage, stating that after peaceful reunification, Taiwan compatriots would no longer need to worry about shortages of energy and other essential supplies. How should this statement be viewed?

Taiwan’s shipping fleet has already shifted to transporting natural gas and oil from the United States. Helium and other resources have also been fully redirected to the U.S. The Central Bank of the Republic of China (Taipei) is selling U.S. Treasury bonds to obtain U.S. dollar cash for purchasing oil, natural gas, and other commodities. Unlike other advanced economies—which can sell gold reserves to obtain dollars—Taiwan, due to political factors, can only conduct spot transactions in the gold market: purchased gold must be physically shipped back to Taiwan and cannot be held in custody in New York. Energy supplies are sufficient. This is analogous to the food supply issue: as long as international markets remain functional, all advanced industrial economies will certainly be able to procure energy and food. However, the situation differs markedly for many Asian, African, and Latin American economies. For instance, the mainland has sold several shipments of energy to the Philippines—perhaps out of concern that, without fuel, the Philippines would be unable to resupply its dilapidated vessels stationed in the South China Sea.

What is the outlook for Iran’s potential blockade of the Strait of Hormuz? Could Taiwan’s economy truly collapse amid an oil shortage?

In December 2025, Taiwan’s crude oil import sources were distributed as follows: Saudi Arabia accounted for 40.63% (the largest share), Kuwait 16.98%, the United States 21.05%, the United Arab Emirates 12.13%, and Qatar 8.67%. In other words, roughly 78% of Taiwan’s crude oil imports would fall within the high-risk zone if the Strait of Hormuz were blocked. Taiwan’s petroleum reserves can last only three months; if the Strait remains blocked for that duration, Taiwan’s economy would indeed collapse. One month ago, the international oil price stood at USD 63 per barrel; it has now surged to USD 90—a jump of USD 27. Rising oil prices → higher transportation costs → increased corporate expenses → rising consumer goods prices → reduced consumption → slower economic growth. A sharp rise in Taiwan’s domestic oil prices would trigger severe economic problems for its people. There’s little choice but to endure it—for now. Meanwhile, American and Russian oil exporters are delighted: ‘We’ve got plenty of oil to sell—and at USD 90 per barrel today. Just wait: it’ll hit USD 100 per barrel in a few days.’

Taiwan Plans $13 Billion in Extra Energy Spending Given High Global Prices

Sep 30, 2026

Taiwan plans a $13 billion subsidy for state-owned energy firms Taipower and CPC to absorb soaring global fuel costs amid Middle East turmoil. The move aims to stabilize domestic prices and prevent financial distress for the oil refiner facing credit downgrades.

reuters

2026-09-30

Taiwan Plans $13 Billion in Extra Energy Spending Given High Global Prices

Taiwan Plans $13 Billion in Extra Energy Spending Given High Global Prices

FAQ