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Maria Siow

Vietnam is among Southeast Asian countries most hard-hit by the global energy crisis, with Hanoi’s bid to forge deals with Russia this week laying bare its urgency to stem the bleed that may threaten its objective of double-digit economic growth.
Observers also say the fallout in fuel supply caused by the Iran war could even chip away at the legitimacy of Hanoi’s new leadership.
Vietnamese Prime Minister Pham Minh Chinh’s official visit to Russia this week reportedly saw the signing of several agreements, including on oil and gas cooperation.
His trip – which ends on Wednesday – to the major oil-producing nation comes as Vietnam seeks to shore up its fuel reserves amid global supply disruptions from the Middle East conflict.
The visit is focused on deepening ties with Russia and expanding cooperation in trade, investment and energy, according to a Vietnamese government statement on Sunday. “Cooperation in oil and gas energy will be reinforced in all fields of trade, exploration, extraction and human resource training,” it added.

During talks in Moscow on Monday, both sides agreed to expand cooperation in new, clean and renewable energy, and signed an agreement to build two nuclear power plants in Vietnam.
They also reached a deal to help PetroVietnam and VietNamElectricity construct port infrastructure for the import and storage of liquefied natural gas, and LNG power plants.
The cost of 95-octane petrol and diesel in Vietnam has soared by 50 per cent and 70 per cent, respectively, since the US-Israel war against Iran in late February sparked fuel price increases and fears of shortages around the world.
That prompted Chinh to hold phone talks requesting fuel support from countries including Qatar, Kuwait, Algeria and Japan, according to Hanoi.
Ha Hoang Hop, chairman of VietKnow, a Hanoi-based think tank focusing on political risks, said given severe uncertainties over Middle East supplies and shipping routes, Vietnam was “moving early” to secure fuel and power.
“Energy is clearly the strategic anchor of this visit,” he said, noting that the request for fuel support reflected a “planned diversification drive”.
Energy now sat at the centre of both Vietnam’s development strategy and its great‑power balancing, Hop said, noting that deeper cooperation with Russia on oil, gas and even nuclear offered Vietnam another “strategic pillar” alongside its Gulf and OECD partners.
“The current shock is also accelerating overdue reforms in forecasting, refinery policy, LNG build‑out and renewables, potentially yielding a more resilient energy system.”
Hop said Hanoi was also seeking access to Japanese strategic stocks and longer‑term crude and natural gas arrangements with Gulf and African suppliers.


Hop noted that previous fuel shortages had led Hanoi to tighten regulation, impose minimum supply quotas and push for stronger commercial reserves and inspections.
In 2022, Vietnam experienced a severe localised shortage where petrol stations in Ho Chi Minh City and surrounding provinces ran out of fuel or restricted sales due to global supply disruptions and high costs.
Public sentiment this time, Hop said, “is concerned but not panicked”.
Still, the current energy shortage was “seriously threatening” Vietnam’s objective of double-digit growth for 2026, said Alexander Vuving, a professor at the Daniel K. Inouye Asia-Pacific Centre for Security Studies in Honolulu.
“If this goal is not met, it will make a big dent in the legitimacy of Vietnam’s new leadership,” Vuving said, adding that Hanoi must therefore “put a big bet” on its relations with Russia.
Vietnam’s leadership, particularly under General Secretary To Lam, has tied its political legitimacy tightly to economic performance, making the failure to meet growth targets a significant potential risk to its stability.
Vuving said while the deals signed with Russia were driven by both long-term vision and immediate urgency, achieving double-digit growth rates annually starting this year required a high level of energy demand.
“Vietnam will need not just a lot of oil and gas but also nuclear power plants and wind and solar power plants,” he said, noting that the nuclear power plant agreement was a key mission of the prime minister’s trip.
“If the Iran war continues into April, Vietnam will likely experience a serious energy crunch.”
Hanoi also sees the current “near-crisis” as one that will help drive utilisation of non-fossil fuel sources such as nuclear, wind and solar, and to geographically diversify Vietnam’s hydrocarbon imports, according to Vuving.

Carl Thayer, an emeritus professor at the University of New South Wales and a Vietnam country specialist, said it remained to be seen whether any of the assurances from Chinh’s phone calls requesting fuel support would materialise.
Kuwait and Qatar, he noted, are held hostage by Iran’s disruption of oil shipped through the Strait of Hormuz, while “it is unclear how soon Algeria, Angola and Japan could act given the uncertainty about how long the war in Iran will last”.
Thayer also said there would be inevitable time lags in production as oil installations must repair damage and restart after shutting down.
To mitigate the fuel shortage, Hanoi has reduced import tariffs on petroleum to zero per cent till the end of April, lifted environmental protection taxes on fuel and authorised the use of the fuel price stabilisation fund.
The fund is used to subsidise consumers and lower domestic prices when international prices rise rapidly, helping manage inflation and support economic stability.
The government is also encouraging businesses to let their employees work from home, while urging citizens to reduce private vehicle usage.
“It will take time for the measures adopted by the Vietnamese government to take effect,” Thayer said, noting that subsidies from the fund might only last 15 to 30 days at current consumption rates.


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Labourers work at a construction site in Hanoi, Vietnam, in January. Photo: EPA

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The energy shortage is ‘seriously threatening’ Vietnam’s growth objective and could dent the new leadership’s legitimacy, analysts say


The energy shortage is ‘seriously threatening’ Vietnam’s growth objective and could dent the new leadership’s legitimacy, analysts say.


Why Vietnam is leaning on Russia to weather energy turmoil

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The energy shortage is ‘seriously threatening’ Vietnam’s growth objective and could dent the new leadership’s legitimacy, analysts say

The energy shortage is ‘seriously threatening’ Vietnam’s growth objective and could dent the new leadership’s legitimacy, analysts say