The recent US-Israeli airstrikes on Iran have drawn international attention, with markets worried that escalating tensions could impact global energy supplies and even affect Taiwan's oil and gas imports and power stability. In response, the Ministry of Economic Affairs stated today (2nd) that the domestic energy supply is generally sufficient, and the government has long established a mechanism for diversifying import sources and maintaining a safe reserve. Even in the face of unforeseen circumstances such as the closure of the Strait of Hormuz, the government has a complete capacity to respond.
The Ministry of Economic Affairs emphasized that short-term oil and gas shipping schedules have not been affected, and that long-term contingency plans and flexible dispatch mechanisms have been deployed. It will continue to monitor the development of the international situation and propose corresponding measures in a timely manner to ensure energy and livelihood stability.
Diversifying import sources – crude oil from 10 countries and natural gas from 14 countries – reduces risks.
In response to concerns that a conflict between the US and Iran could affect Taiwan's energy security, the Ministry of Economic Affairs pointed out that the government normally adopts three major strategies: "diversifying import sources," "mainly using long-term contracts for procurement," and "building up safety reserves" to reduce dependence on a single country or shipping route.
According to the Ministry of Economic Affairs, Taiwan's crude oil imports last year (2025) came from 10 countries, and natural gas from 14 countries, resulting in a relatively diversified supply structure. Although the conflict led to the closure of the Strait of Hormuz, which did affect "some" oil and gas imports, it has been confirmed that oil and gas vessels arriving in port in the short term will not be affected, and the supply chain continues to operate normally.
At the same time, future energy purchases will increase, including those from the United States, to further diversify import sources.
With LNG accounting for up to 80% of power generation, CPC Corporation and Taiwan Power Company have activated a joint early warning mechanism.
In the natural gas sector, Taiwan imports liquefied natural gas (LNG) primarily for power generation, accounting for as much as 80%. Fluctuations in the energy market directly impact the stability of power generation.
In response, the Ministry of Economic Affairs stated that CPC Corporation and Taiwan Power Company have established a supply and demand linkage mechanism and early warning system, which can keep abreast of changes in market demand and plan shipping schedules and inventory management in advance.
The core of this mechanism lies in "early forecasting and flexible scheduling," which reduces the impact of short-term international supply fluctuations on the domestic power system through adjustments to shipping schedules and inventory management.
13 GW of coal-fired backup power activated, forming a national-level power defense line.
In addition to the oil and gas supply layout, the power backup plan was also a key focus of this explanation.
Currently, coal-fired power generating units include the Taichung, Hsingta, Dalin, and Linkou power plants under Taiwan Power Company, as well as the privately-owned Heping power plant, with a total installed capacity of 13 GW. This means that even when natural gas supply is under pressure, coal-fired power can still provide flexible support to stabilize the overall power supply system.
It is worth noting that in recent years, based on national security needs, units 1 to 4 of the Xingda coal-fired power plant (capacity 2.1GW) have been gradually converted into backup power facilities. These units are not normally operated, but can be started immediately in special circumstances, playing a key backup role.
The Ministry of Economic Affairs pointed out that through the above-mentioned multi-level dispatch mechanism, power supply stability can be maintained under different circumstances, avoiding systemic risks caused by the obstruction of a single energy source.
International oil price volatility pressures intensify; oil price stabilization mechanism to be activated.
In addition to supply-side concerns, the market is also worried about the potential for sharp fluctuations in international oil prices, which could affect domestic prices and people's livelihoods.
The Ministry of Economic Affairs stated that it will instruct CPC Corporation, Taiwan to review and respond in accordance with the "Operating Principles of the Domestic Gasoline and Diesel Floating Price Adjustment Mechanism" and oil price stabilization measures. This move aims to regulate oil price fluctuations through a systematic mechanism, assist in protecting people's livelihoods, stabilizing prices, and mitigating the impact of rising international oil and gas prices.
During periods of international market turmoil, government mechanisms that smooth the price curve can prevent one-off, drastic adjustments from causing excessive shocks to consumers and industries, and also help stabilize market expectations.
This article, "Will the Escalating US-Iran Conflict Impact the Energy Market? Taiwan's Ministry of Economic Affairs: Import Diversification and 13GW of Backup Power Ensure Domestic Supply," first appeared on ABMedia ABMedia .
