AGP Executive Report

Middle East Energy Shock: Oil jumped after Israel struck targets in Iran, threatening a fragile ceasefire and keeping Strait of Hormuz risks front and center, with Brent back near the mid-$90s and global growth forecasts pressured. Market Mood in Asia: Asian equities slid as the AI-led rally cooled and tech selling hit semiconductors; Hong Kong and Japan were among the weak spots while oil and the dollar stayed supported by the conflict. India Fuel Policy: India launched E85 (85% ethanol) at select pumps for flex-fuel vehicles, aiming to cut crude import dependence; meanwhile domestic LPG prices were hiked again by ₹29 per cylinder, adding to household pressure. Philippines-Russia Energy Diplomacy: Marcos is expected to meet Putin at the ASEAN-Russia summit in Kazan, with energy among the cooperation areas. Regional Power Trade: ADB readies a $10m grant to kick-start a Pan-Asia Power Grid push to expand cross-border electricity and speed renewable integration. Nuclear in the Philippines: MUFG signaled openness to financing nuclear projects only if aligned with Japanese government backing. Japan Economy Watch: Revised data showed Japan’s Q1 growth lost momentum as capex stayed weak, with energy-cost cushioning in focus.

Oil & Gas Markets: OPEC+ agreed to lift July quotas by 188,000 bpd, but analysts say it won’t matter much while the Strait of Hormuz stays effectively closed, keeping crude risk premiums elevated. Power Demand & Grid: Bangladesh says it has enough electricity overall, though peak summer and irrigation demand can trigger temporary disruptions tied to fuel supply, transmission limits and weather. LPG in Focus: India raised domestic LPG by Rs 29 to Rs 942 for a 14.2-kg cylinder in Delhi, with the government arguing it’s still among the world’s lowest and that upstream costs are being absorbed. Energy Security Diplomacy: Nepal and India are pushing a reset—Nepal’s FM says border disputes should be handled via existing bilateral mechanisms, while both sides also advanced cross-border digital payments and legal cooperation. Regional Energy Partnerships: Uzbekistan and India discussed expanding industrial cooperation including critical minerals, coal gasification and nuclear energy. Renewables & Transition Finance: IRENA signed up Etihad Credit Insurance to help de-risk renewable projects via its ETAF platform. Asia Tech Power: China launched a prefabricated computing energy hub in Qingdao aimed at faster, lower-land, lower-carbon power for AI data centres. Geopolitics & Shipping: US forces seized the Iranian-linked supertanker M/T Davina carrying about 1.9 million barrels, part of a crackdown on Iran’s “ghost fleet.”

Natural Gas Discovery: Oil India says it has found natural gas in the Andaman Offshore Basin, with testing at the Sri Vijayapuram-3 well (15 km off the east coast) showing continuous flaring and prompting sampling and isotope work. Energy Prices & Households: India raised domestic LPG by Rs 29 per 14.2-kg cylinder from June 7 (Delhi to Rs 942), the second hike in three months as global costs bite and under-recovery remains around Rs 700 per cylinder. Power Market Stress: With West Asia disruption squeezing LNG flows, India’s gas-fired power plants are turning to spot purchases—spot gas buying by power-sector entities jumped sharply in April-May, while long-term LNG supply to gas-grid capacity stayed absent. LNG Supply Shift: In May, the US became India’s top LNG source as imports recovered toward pre-war levels despite Strait of Hormuz disruption, with Qatar and UAE volumes hit and cargoes rerouted. Data Centres vs Climate Goals: Malaysia’s data-centre boom is driving faster gas-fired power generation, putting pressure on its pledge to cut fossil fuel use by 2050. Regional Diplomacy: India and Nepal held talks in New Delhi, including a UPI-NPI cross-border payments link and renewed focus on hydropower and energy cooperation. Macro Outlook: India’s FY27 GDP growth is seen moderating to around 6.5% amid higher input costs, geopolitical risks and El Niño-linked monsoon uncertainty. US Sanctions on Iran-linked LPG: OFAC designated an Iranian LPG smuggling network disguised as Omani product, targeting people, front firms and tankers tied to Iran’s energy revenue.

West Asia Energy Shock Watch: With the Strait of Hormuz effectively blocked for months, crude is still staying under $100 a barrel thanks to workarounds like record US exports and a sharp slowdown in Chinese demand, but analysts warn the buffers won’t last forever. India–Venezuela Energy Ties: Venezuela’s acting president Delcy Rodríguez toured India’s Jamnagar refinery and pushed for deeper oil-and-gas cooperation, while Indian firms signal interest in expanding in Venezuela as New Delhi diversifies crude supply. Frontier Gas Find in India: Oil India reported natural gas in the Andaman Offshore Basin from the Sri Vijayapuram-3 well, with sampling and testing under way—another step toward reducing import dependence. ASEAN Energy Regulation: Malaysia’s Energy Commission is studying an energy regulatory sandbox aimed for a 2027 launch to test new tech and business models while keeping system stability. Consumer Energy Costs, India: India standardised edible oil pack sizes to improve price transparency, while West Asia-linked fuel price pressure is expected to strain household budgets. Energy Tech Industry: China’s new-generation axial flux motors have entered mass production for electric drive buses, boosting efficiency and helping scale EV-related supply chains.

Biofuels Push in India: India began rolling out E85 (80–85% ethanol) at its first commercial dispensing station in New Delhi, aiming to accelerate flex-fuel adoption after ethanol blending hit 20% ahead of schedule. Mobility Shift: Maruti Suzuki launched India’s first flex-fuel car (Wagon R), designed to run on ethanol blends from E20 to E100, linking farm incomes and lower oil import dependence. Japan Energy Buffer: Japan’s parliament approved a 3.11-trillion-yen extra budget for FY2026, including reserves and subsidies to cushion households and power costs amid Middle East-linked energy price pressure. Andaman Gas Find: Oil India reported natural gas presence in a third exploratory well in the Andaman offshore block, adding to earlier gas indications and strengthening India’s offshore exploration outlook. Grid for Renewables: China installed the world’s largest offshore converter station for wind power in Guangdong, a major step for far-from-shore renewable transmission. Energy Security Flashpoint: Arab League chief urged UN action over oil tanker attacks in the Arabian Gulf, as Strait of Hormuz traffic remains constrained and shipping risks rise. Digital Infrastructure Boom: India’s PM Modi backed AirTrunk’s plan to invest over Rs 3 lakh crore and build 5 GW of data centres, underscoring power and energy demand growth tied to AI.

Pacific Islands Clean Energy: ISA and the World Bank launched a Pacific SIDS solar dialogue in Bali, aiming to move from policy to bankable projects, including an ISA SIDS Platform E-Marketplace tender for a 220 MW solar-plus-storage pipeline in Mauritius. India Renewable Push: PM Narendra Modi told a World Environment Day event in Surat that Gujarat is a key pillar of India’s energy transition, citing its 50 GW renewable contribution and linking the state’s role to green hydrogen, ammonia and green steel. India Flex-Fuel Momentum: India’s push for ethanol mobility got a boost with the launch of its first flex-fuel car, while industry discussions stressed multiple low-carbon fuel pathways to cut import dependence. Oil Market Shock—Iran: Iran’s crude exports plunged to a six-year low in May as US naval blockade pressure tightened, leaving barrels stranded and raising uncertainty for regional energy flows. India–Venezuela Energy Ties: Hardeep Singh Puri met Venezuela’s Acting President Delcy Rodríguez to expand long-term oil and gas cooperation as India diversifies crude sourcing amid Middle East disruption. Japan Energy Buffering: Japan cleared a supplementary budget to cushion households and the economy from Middle East-driven energy price risks, including support for LPG users and replenishing energy bill reserves. Data Centers Meet Power Demand: AirTrunk’s planned $30bn India buildout underscores how AI infrastructure is becoming a major electricity and grid challenge across Asia.

India–Venezuela Energy Push: India’s oil minister Hardeep Singh Puri says an Indian technical team will soon visit Venezuela to assess new energy opportunities, pointing to Venezuela’s huge crude reserves and India’s refining capability as April-May 2026 crude supplies already remain significant. India–UK Clean Energy & Minerals: UK Foreign Secretary Yvette Cooper’s India visit produced deals under the Vision 2035 roadmap, including a UK-India Critical Minerals Supply Chain Observatory and cooperation spanning defence, education and clean energy. US–India Trade Signals: Donald Trump again called PM Modi a “good friend” and said a US-India trade agreement is on track, while reiterating tariff complaints—an issue that can spill into energy-linked trade and investment. Middle East Oil Shock Watch: The IEA warns the world is nearing a “red zone” if the Strait of Hormuz isn’t fully reopened by late June-July, even as oil prices ease on hopes for de-escalation. Japan SAF Feedstock Drive: Japan is pushing harder to source sustainable aviation fuel, leaning on “Fry to Fly” used-cooking-oil collection as it tries to reach a 2030 SAF target amid constrained supply. Japan Nuclear Rebuild Plan: NHK reports Japan is drafting targets to replace ageing reactors—2-5 by the 2040s and up to 11-14 by the 2050s—to stabilize power demand, especially from AI data centres. China LPG Safety Crackdown: Northeast China saw a deadly blast in Liaoning linked to a suspected LPG cylinder leak, while separate reporting highlights enforcement against illegal LPG refilling in India. China Battery Pivot: China’s solar majors are ramping battery exports as PV growth slows, betting on storage demand to cut fossil reliance.

Aviation Fuel Shock Shield: India’s cabinet approved a ₹10,000 crore (about $1bn) jet fuel price stabilisation fund to cap costs for airlines as West Asia tensions keep jet fuel prices elevated. Ethanol Push for Energy Security: Maruti Suzuki launched India’s first flex-fuel Wagon R (E20–E100), while the government plans E85 rollout—starting with 50–100 stations in Delhi-NCR, Mumbai, Pune and Nagpur, scaling to 500 by end-2026 and 5,000 by end-2027. Hydrogen Storage Pilot: Payal Industrial Park and Fourier will deploy hydrogen-based long-duration storage at Dahej, aiming for week-plus clean power for industrial operations. Energy Diplomacy Diversifies Supplies: Venezuela’s acting president Delcy Rodríguez met India’s Modi and officials, with oil talks focused on expanding crude supply as India seeks alternatives amid Strait of Hormuz disruption. Regional Power Transition in Malaysia: Tenaga Nasional (TNB) says ESG-led operations helped it secure an upgraded AA MSCI rating and delivered 4.3GW of installed renewables, as grid modernisation and data-centre demand drive investment. Quad Energy-Critical Minerals Signal: US Secretary of State Marco Rubio said a Quad leaders meeting is targeted by year-end, building on recent cooperation on stable energy and critical minerals. LPG Under-Recovery Persists: India’s LPG supply is stable, but oil firms still face near-₹700 under-recovery per cylinder, despite higher domestic output and imports.

Power Markets: India’s peak power demand hit a record 270.82 GW in May as heat and demand surged, while IEX electricity trading rose 18.6% y/y to 12,983 MU and day-ahead prices climbed 18.3% y/y to ₹4.88/unit. Oil Shock & Currencies: Oil jumped after Iran launched ballistic missiles toward Kuwait and Bahrain, lifting Brent and WTI; the rupee slid to around 95.70 per dollar as Gulf tensions fed into higher crude costs. Aviation Fuel Shield: India approved a ₹10,000 crore ATF price stabilisation fund to blunt West Asia-driven jet fuel spikes for airlines. Energy Security Diplomacy: Japan’s PM Takaichi Sanae may visit India in July, with talks expected to include energy supply stability and resilient critical mineral chains. Gas Supply Shifts: India’s LPG imports in May leaned heavily to the US (55%) and Iran (12%), reflecting ongoing West Asia disruption. Renewables & Jobs: India’s clean energy buildout added about 6.6 lakh jobs over four years, with rooftop solar the biggest employment driver. Storage in Australia: Taiwan’s Recharge Power and Energy Decarb plan a 292MWh battery storage pipeline in Australia, targeting C&I customers. Grid Reliability Debate (Malaysia): Malaysia’s energy transition forum argued nuclear can complement renewables for baseload stability as demand rises. Pacific Waste Fight: Fiji rejected an Australian billionaire’s plan to ship and burn regional rubbish for energy, citing public health, hazardous ash and tourism risks. EV/Plastics Supply Chain Stress (Japan): Japan faces plastic shortages as naphtha supply tightens from Middle East crisis, with retailers and industry bracing for worsening conditions. Solar-to-Data Centers (China): Jinko plans to supply power from its solar plants directly to desert AI data centers, signaling tighter links between renewables and compute demand. Battery Storage Push (Brazil): Investors are lining up for Brazil’s first battery auction to help absorb excess solar and wind generation. Trade/Tax Flows (India): India is set to scrap capital gains tax on FPI investments in government securities to support overseas inflows amid the oil shock. Infrastructure Innovation (Asia Pacific): AECOM and ULI launched an Asia Pacific Infrastructure Innovation Index, spotlighting how the region is prioritising digital delivery and resilience. Regional Risk-Off (Markets): Asia stocks slipped as renewed US-Iran tensions revived risk aversion even as some ceasefire hopes eased oil off highs.

Middle East Energy Shock: The OECD cut its global growth outlook as the U.S.-Iran conflict keeps energy routes and costs under pressure, with two scenarios ranging from a “time-limited” disruption to prolonged Strait of Hormuz strain. India Aviation Shield: India approved a $1bn (Rs 10,000 crore) jet-fuel price stabilisation fund, using interest-free advances to oil marketing companies to protect airlines from Iran-war-driven ATF spikes. Oil Market Pressure: Oil jumped on renewed Gulf attacks and ceasefire uncertainty, lifting Brent back toward $100 while gold and silver slipped on a firmer dollar. EV Momentum in Asia: The IEA said EVs hit 25% of global new car sales in 2025, with China dominating production and sales. Malaysia Gas Security + Carbon Tech: Malaysia said domestic gas keeps power supply adequate, while Gas Malaysia launched Asia Pacific’s first LOOP system to turn methane into graphene and hydrogen-rich gas. Iraq Export Diversification: Iraq approved a major ramp-up of crude exports via the Kurdistan-Turkey pipeline to reduce reliance on Hormuz-linked routes. Renewables Buildout: Jinko Solar forecast doubling 2026 energy storage shipments to 10 GWh, citing high electricity prices across Asia-Pacific. Grid Storage in Japan: A consortium broke ground on a 67 MW / 230.1 MWh battery project in Fukuoka for 2027 operations. India Solar Scale: India claimed it became the world’s No.2 solar growth market in 2025, surpassing the U.S.

Middle East Shock on Energy Prices: Oil jumped again as Iran–US talks stalled and Iran launched missiles toward Kuwait and Bahrain, keeping Strait of Hormuz risk front and center; gold slipped as crude rose and rate-hike fears returned. Japan Fiscal Cushioning: Japan approved a $19.4bn extra budget (3.1tn yen) to subsidize fuel and utility costs tied to Middle East turbulence, while Japan also postponed proposed tighter rules on foreign real-estate purchases to fall. Asia Monetary Pressure: Central banks across Asia are turning hawkish as energy shocks and AI-driven demand threaten to keep inflation elevated. India Fuel & Metals Policy: India kept petrol/diesel unchanged despite crude volatility, while tightening silver import rules by restricting more forms and requiring prior DGFT authorization. Trade Corridors for Energy Security: India–Myanmar agreed to expand trade via Rupee-Kyat, including petroleum, energy and mining cooperation; India–Oman CEPA took effect as a Gulf-stability hedge. Renewables Buildout in the Region: Australia’s utility-scale solar and wind generation rose 10% YoY in May, and China pushed private capital into strategic energy projects, including grids and pipelines. Pacific Security Tilt: Australia and the Solomon Islands moved toward a “comprehensive treaty” to deepen cooperation after the islands’ 2022 security pact with China.

Strait of Hormuz Watch: Japan’s PM Sanae Takaichi urged “free and safe passage” for ships in phone talks with Iran, as oil and shipping risk premiums keep markets jittery. Regional Macro: AMRO cut ASEAN+3 inflation to 1.8% but warned West Asia disruption is still feeding higher energy, commodity and logistics costs, with petroleum supplies tightening. India Energy Security: India’s LPG sourcing is shifting fast—US now supplies 55% of imports in May as Gulf cargoes fall—while India also tightens silver import rules, adding prior approvals. Power & Renewables Buildout: Avaada secured $950m for firm and dispatchable renewables plus solar in Rajasthan and Gujarat; Invergy opened a 3 GWh BESS factory in Uttar Pradesh; Sungrow unveiled a smart BIPV module for smarter solar plants. Shipping Decarbonisation: COSCO’s retrofit work delivered the first methanol dual-fuel container retrofit under Seaspan’s program, cutting the vessel’s EEDI by ~55%. Policy & Trade: India-US negotiators started a three-day round to finalize an interim trade deal; India-Myanmar agreed to expand trade via the rupee-kyat settlement, including energy and mining. Market Mood: Oil slipped on mixed Iran talk signals while gold steadied, and energy-focused equity funds outperformed amid power, oil & gas and renewables earnings optimism.

Middle East shock to energy flows: Oil jumped again as Iran threatened to halt talks and potentially block the Strait of Hormuz, keeping Asia markets skittish and pushing insurers to reprice war-risk cover for shipping. FX and funding pressure: India’s rupee stayed vulnerable as oil volatility met foreign stock selling, with analysts warning USD/INR could slide toward 98–100 if tensions drag on. Shipping and insurance strain: India reported a surge in services to East of Hormuz and the Red Sea, while insurers said war-risk premiums have spiked sharply voyage-by-voyage. Clean power grid reality check: Southeast Asia’s renewables push is shifting from building generation to fixing grids and accelerating the ASEAN Power Grid to deliver clean electricity reliably amid rising demand from data centres. EVs and energy transition in the region: Chinese EVs are rapidly gaining share in Indonesia, while Ethiopia moved ahead with electric buses after banning gasoline/diesel vehicle imports. Solar hardware push: Sungrow unveiled a smart PV module aimed at “self-diagnosis” and autonomous plant functions, signaling tighter digital control in Asia’s solar buildout. Policy and geopolitics: India and Australia stressed freedom of navigation as West Asia disruptions threaten energy supply chains.

Middle East Oil Shock: Gold slid while crude jumped as US-Iran strikes and Hormuz uncertainty kept energy markets jumpy, with Asia stocks riding AI gains even as bullion weakened. Southeast Asia Fuel Relief: The Philippines cut diesel, gasoline and kerosene after weeks of hikes, but LPG rose—showing how the Iran-linked squeeze is easing unevenly. India Jet Fuel Watch: India kept domestic ATF prices unchanged in June, while international jet fuel was cut 27%, offering airlines some cost breathing room. India Energy Costs: OMCs face under-recoveries of Rs 650 per LPG cylinder and Rs 30 per litre on domestic ATF, with the government continuing compensation. Regional Power Diplomacy: Qatar’s energy minister met China’s National Energy Administration chief on cooperation. Central Asia Green Corridors: At Baku Energy Week, Azerbaijan, Uzbekistan and Kyrgyzstan pushed renewable and grid connectivity plans, including the Central Asia–Azerbaijan Green Energy Corridor, with feasibility work and financing support highlighted. Rooftop Solar Boom (Philippines): Ember says Chinese panels are driving a rooftop surge, making the Philippines a major export destination as households chase lower power bills. Energy Transition Tech: China’s auto parts makers are pivoting to robotics as margins tighten, reflecting the next phase of electrification into intelligence. Energy Security & Trade: India-US interim trade talks advanced, while India-Oman CEPA came into force—both tied to broader resilience amid West Asia risks.

Data-centre renewables in Australia: Google, European Energy Australia and AirTrunk are preparing the 25MW Mulwala Solar Farm in NSW, a sign AI growth is pushing tech firms to back new clean power directly. Pacific energy sovereignty: Fiji, Tuvalu and Vanuatu leaders trained on installing and maintaining solar systems as fuel costs rise and imported diesel/oil strains budgets. West Asia shock hits Asia travel: Southeast Asia tourism is bracing for higher jet fuel costs and flight disruptions tied to the Iran war, threatening summer demand. Japan energy bill support: Japan is drafting a supplementary budget (over ¥3.1tn) to cushion households and municipalities from higher electricity and gas prices. EV supply-chain geopolitics: China still dominates permanent magnet supply for EVs; the US is trying to secure rare-earth oxides outside China to reduce bottlenecks. India power and efficiency push: EESL is rolling out advanced energy and water efficiency tech for Andhra Pradesh MSMEs, aiming to cut operating costs and boost green jobs. China manufacturing steadies: A private PMI shows factory growth continuing in May, with easing price pressures but weaker export orders. Energy market driver: Oil prices are rising on renewed Israel-Lebanon escalation and Hormuz uncertainty, keeping inflation pressure in focus.

India Power Push: India is planning to lift generation capacity from 283 GW to nearly 300 GW next year as peak demand hit 270.8 GW (May 21), with nuclear targeted to reach 100 GW by 2047 and a power adequacy plan mapped to 2029-30. Nuclear & Innovation: Science minister Jitendra Singh says India has shifted from technology follower to global innovation leader, citing progress in frontier areas including nuclear and clean energy. Diesel Decarbonisation: India may mandate isobutanol-blended diesel later this year to cut emissions and boost energy security, with tests on engines already underway. Fuel Export Relief: India cut export duties on petrol, diesel and ATF from June 1, aiming to balance global price swings with domestic supply. US-India Trade Talks: Chief negotiators begin four-day talks in New Delhi (June 1-4) to finalise an interim trade pact and advance the broader bilateral trade agreement, including energy and economic security. Renewables in the Region: Cambodia is accelerating renewables to reduce costly fuel imports as West Asia conflict strains tourism and growth; Malaysia raises biodiesel blending from B10 to B15 from June 1. China Economy & Safety: China’s May factory activity softened while illegal mining in Yunnan killed five, underscoring ongoing enforcement and risk. LNG Demand Signals: Mitsui eyes LNG expansion as data centers drive new gas demand.