Will the escalation of US-Iran conflict impact the energy market? Taiwan's Ministry of Economic Affairs: Diversified imports and 13GW backup power ensure domestic supply without concern

Recently, the U.S.-Iran airstrikes have attracted international attention. Markets are worried that escalating conflicts could impact global energy supplies and even affect Taiwan’s oil and gas imports and electricity stability. In response, the Ministry of Economic Affairs stated today (2nd) that the domestic energy supply remains sufficient overall. The government has long established diversified import sources and a reserve safety stock mechanism, ensuring full contingency capabilities even in emergencies like the Strait of Hormuz blockade.

The Ministry emphasized that short-term oil and gas shipping schedules are unaffected, and long-term backup plans and flexible dispatch mechanisms have been deployed. They will continue to monitor international developments and implement appropriate measures to ensure energy and livelihood stability.

Diversified Import Sources from 10 Countries for Crude Oil and 14 Countries for Natural Gas Reduce Risks

Regarding concerns that the U.S.-Iran conflict might threaten Taiwan’s energy security, the Ministry pointed out that the government routinely adopts three main strategies: diversification of import sources, primarily long-term contracts, and maintaining safety reserves, to reduce dependence on any single country or route.

According to the Ministry, in 2025, Taiwan imported crude oil from 10 countries and natural gas from 14 countries, with a relatively dispersed supply structure. Although the current conflict has led to a blockade of the Strait of Hormuz, affecting some oil and gas imports, Taiwan has already secured that short-term ships arriving in ports are unaffected, and supply chains remain operational.

Additionally, Taiwan plans to increase energy procurement from the U.S. and other sources to further strengthen the diversification of import channels.

LNG Accounts for Up to 80% of Power Generation; CPC and Taipower Activate Early Warning Mechanisms

Regarding natural gas, Taiwan mainly imports liquefied natural gas (LNG) for power generation, accounting for up to 80%. Market fluctuations could directly impact power stability.

The Ministry stated that CPC Corporation and Taiwan Power Company have established supply-demand communication and early warning systems to monitor market changes in real-time, allowing for advance planning of shipping schedules and inventory management.

The core of this mechanism is “early prediction and flexible dispatch,” which adjusts shipping schedules and manages inventories to reduce the impact of short-term international supply fluctuations on the domestic power system.

13 GW of Coal Backup Power Activated for National Security-Level Power Defense

Besides energy supply arrangements, power backup planning is also a key focus of this briefing.

Currently, coal-fired power plants include Taipower’s Taichung, Hsingta, Dalin, and Linkou plants, with a total capacity of 13 GW. This allows for flexible support from coal power when natural gas supplies face pressure, ensuring overall power system stability.

Notably, in recent years, units 1 to 4 of the Hsingta coal plant (capacity 2.1 GW) have been converted into standby facilities for national security reasons. These units are not operated regularly but can be activated immediately in special situations, playing a critical backup role.

The Ministry pointed out that through these multi-layered dispatch mechanisms, power supply can be maintained under various scenarios, preventing systemic risks caused by disruptions in a single energy source.

International Oil Price Volatility Worsens; Price Stabilization Mechanism to Be Activated

Beyond supply concerns, markets are also watching for potential sharp fluctuations in international oil prices, which could impact domestic prices and livelihoods.

The Ministry stated that Taiwan Oil Corporation will review and respond according to the “Domestic Gasoline and Diesel Price Adjustment Mechanism” and price stabilization measures. This aims to regulate oil price fluctuations through institutional mechanisms, helping to protect livelihoods and stabilize prices, mitigating the impact of rising international oil and gas prices.

During international market turbulence, the government’s mechanisms can smooth price curves, avoiding sudden large adjustments that could severely impact consumers and industries, and help stabilize market expectations.

This article, “U.S.-Iran Conflict Escalation Impacts Energy Markets? Taiwan Ministry of Economic Affairs: Diversified Imports and 13 GW Backup Power Ensure Domestic Supply,” first appeared on Lian News ABMedia.