Recent geopolitical tensions in the Middle East and the resulting increase in global oil prices have raised concerns about inflation and economic stability across emerging markets. For Vietnam, while short-term cost pressures are real, recent government actions suggest more proactive stance, focused on sustainable domestic resource management.
A notable update is the issuance of Directive 09/CT-TTg on 19 March 2026, which outlines a broad set of measures to improve energy efficiency, accelerate the energy transition, and support the adoption of electric transportation. Rather than reacting to short-term oil price movements, the directive reflects a longer-term strategy to strengthen the national energy reserve and reduce exposure to external shocks.
Rather than introducing isolated measures, the directive sets out a coordinated plan across the entire economy. At the central level, ministries are expected to improve energy efficiency standards, ensure stable energy supply, and introduce financial incentives to support energy-saving investments and the adoption of electric vehicles. In parallel, local authorities are required to incorporate these targets into their planning, strengthen enforcement, and support the rollout of electric mobility infrastructure.
Across industries, the focus is on improving how energy is used in practice, especially in sectors such as manufacturing, construction, and transportation. Businesses are encouraged to adopt structured energy management systems, invest in more efficient technologies, and optimize their operations. At the same time, the government continues to promote alternative energy sources, including biofuels and biomass, while investing in grid efficiency and energy storage to support a more stable system.
The directive also places clear emphasis on execution and an active feedback loop between the Prime Minister and responsible government bodies. Goals and immediate tasks are assigned in detail across ministries, state-owned enterprises, and private sector participants, with ongoing monitoring to track progress and address challenges as they arise.
While Vietnam remains exposed to global energy prices as a net importer, these measures demonstrate that it is actively addressing this risk through structural reforms rather than short-term intervention. This approach is consistent with what we have observed more broadly over the past year, where economic growth is increasingly supported by domestic resilience, driven by targeted reforms in infrastructure, consumption, and regulatory frameworks.
From our perspective, while oil price volatility may continue to affect sentiment in the near term due to the ongoing conflict in the Middle East, the government’s direction supports a more stable medium- and long-term outlook. The focus on efficiency, diversification, and execution reduces vulnerability to external shocks and provides a more predictable environment for businesses and investors.
The Kenno Vietnam Fund invests in high-quality consumer companies that benefit from Vietnam’s resilient economic growth and an expanding middle class driving domestic consumption. If you’re looking for exposure to one of Asia’s fastest-growing economies, feel free to reach out to us.