The escalating conflict in the Middle East is no longer a localised crisis; it has become a critical force reshaping the structure of the global economy. Unlike past energy shocks, its impact goes beyond supply disruptions or price volatility.

Grey-zone friction over fisheries and maritime access currently poses the greatest risk of escalation in the South China Sea. Southeast Asian states should prioritise technology-enabled, issue-specific maritime governance and selectively partner with non-escalatory external actors, like the European Union (EU), to strengthen surveillance and enforcement capacity without attempting to resolve sovereignty disputes.

Philippine domestic divisions and public “word wars” with China risk undermining Manila’s credibility as 2026 ASEAN Chair and eroding ASEAN centrality at a critical moment. Effective leadership will require projecting internal coherence, rallying broader ASEAN unity among claimant and non-claimant states, and converting the Code of Conduct pledge into concrete, legally grounded diplomatic progress.

Expert urges caution when turbulence is mistaken for transformation