Oil shock rewrites the playbook for governments worldwide

The global oil shock is forcing governments to rewrite their economic playbooks at speed.

Since February 28, 2026, the world has entered one of its most volatile periods in years after the conflict between the United States and Iran escalated and led to the closure of the Strait of Hormuz. The fallout has pushed Brent crude above US$120 per barrel, rattled supply chains and forced governments to move quickly to protect households, businesses and fiscal stability.

What is emerging is not a single global formula, but a patchwork of responses. Some countries are tightening budgets and cutting energy use. Others are leaning on targeted subsidies, transport support or deeper structural reform. Together, they reflect a broader shift in policy thinking: away from blanket support and towards more selective, resilience-focused intervention.

Thailand: cost-cutting, energy saving and public relief

In Thailand, the government led by Prime Minister Anutin Charnvirakul has launched its “Thailand 10 Plus” strategy to confront the oil shock on several fronts at once, combining austerity measures, demand management and cost-of-living support.

Key Thai measures include:

• Air-conditioning in state offices set at 26°C
• Reduced lift use and lights off during lunch breaks
• Suspension of all overseas travel by government officials
• Work-from-home policies across the public sector
• Private firms encouraged to adopt WFH, WFA and carpooling
• Planned limits on petrol station hours from 10pm to 5am from April 20
• A proposed THB40 flat fare for electric trains
• Welfare card support raised to THB400 a month
• Social security contribution cuts
• Promotion of B20 diesel priced THB5 below regular fuel

One of the clearest examples of the shift is National Telecom (NT), which has introduced a three-month work-from-home arrangement expected to save THB3–5 million a month. The wider goal is to reduce fuel demand while easing the pressure on household spending and public finances.

Singapore: targeted cash support and business relief

Singapore, despite its wealth and strong fiscal position, has opted for a highly targeted support strategy rather than broad-based intervention.

Its response includes:

• A S$1 billion support package
• Additional cash payouts of S$400–600 per person for 2.4 million citizens
• Direct S$200 support for delivery riders and transport drivers
• Corporate income tax rebates raised from 40% to 50%
• Energy Efficiency Grants expanded to all industries
• Support of up to S$30,000 per company for energy-saving equipment
• Earlier distribution of CDC vouchers worth S$500, brought forward to June 2026 to help households cope with daily living costs.

At the same time, Singapore has focused heavily on supply security. The government has said it holds enough LNG and diesel reserves for several months and is stepping up import diversification, including from Australia, the United States and Mozambique.

The Philippines: emergency mode and transport-focused action

The Philippines, where dependence on Middle Eastern oil is especially high, has gone further by declaring a national energy emergency.

Measures there include:

• A four-day workweek for government agencies, excluding essential services
• THB-equivalent support of 5,000 pesos for public transport drivers and motorcycle taxi riders
• Free bus programmes for workers and students in major cities
• Temporary permission for lower-grade fuel use in shipping and power generation
• Plans to build up a 2-million-barrel strategic petroleum reserve

The emphasis is clear: cut fuel consumption quickly, keep transport moving and stretch available reserves for as long as possible.

Vietnam and Indonesia: using domestic resources more aggressively

Vietnam and Indonesia are taking a somewhat different route, focusing more on domestic fuel management and reducing demand through changes in work patterns.

Vietnam is considering halting crude exports in order to prioritise domestic refining, while also accelerating the rollout of E10 ethanol-blended fuel to reduce reliance on pure gasoline.

Indonesia, meanwhile, has introduced mandatory work-from-home arrangements for civil servants every Friday and is expanding biodiesel blending to B50. It has also frozen electricity tariff increases to shield consumers from another round of rising living costs.

Europe and Japan: structural reform over short-term fixes

In more developed economies, the response has gone beyond temporary relief and into longer-term structural adjustment.

In the European Union, member states are now required to reduce final energy consumption by 1.5% a year. Policymakers are also pushing windfall taxes on energy firms to help fund support for vulnerable households and hard-hit industries. New building rules are driving large public and commercial properties towards zero-emission targets, while regulators are even beginning to scrutinise the energy consumption of AI systems and data centres.

Japan, meanwhile, is dealing with the end of long-running energy subsidies, a shift that is expected to lift electricity and gas bills by 10–30%. In response, Tokyo is promoting home energy-saving upgrades under its “Housing Energy Saving 2026” campaign and accelerating the restart of nuclear reactors to reduce dependence on imported LNG. By March 2026, 15 reactors had resumed operation, with more under review.

The UK: tax relief and energy security

The United Kingdom has framed its response around energy security and household protection.

Its measures include:

• Extending fuel tax cuts
• Allocating £53 million to support households that rely on oil heating
• Accelerating investment in domestic wind and nuclear energy
• Strengthening trade ties with the EU to improve supply chain resilience after Brexit

A new global policy mood

Taken together, these moves show how sharply the policy mood has changed. The priority is no longer just keeping prices low at any cost. Governments are increasingly trying to spend more carefully, target support more precisely and build systems that can withstand prolonged disruption.

That marks a wider shift from efficiency to resilience. In this new phase of global instability, the challenge is not simply how to absorb today’s oil shock, but how to prepare for the next one.