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Estimated Economic Impact Drivers
Comparison of key economic strain factors across Asia
Primary Sources
Can Asian economies cope with the fallout from the Iran war?
Counting the CostFuel costs, inflation and debt pressures are testing Asian economies.Working from home. Fuel queues. Blackouts. This is the fallout from the war on Iran across Asia. Governments are scrambling to shield their economies from the worst of the energy crisis. Some are rationing fuel. Others are reintroducing subsidies or limiting exports altogether. And the longer the Strait of Hormuz remains disrupted, the worse it gets – so much so for vulnerable economies.Rising oil prices are driving up import bills — just as remittances fall and currencies weaken. Dollar-priced fuel, food, fertiliser and debt all have become more expensive, forcing governments to burn through reserves, borrow more or cut elsewhere.Published On 7 May 2026
Asia is being hammered by the Iran conflict's economic fallout. The U.S ...
As countries around the world confront the economic fallout from the Iran conflict, Asian economies have been particularly hard hit. Energy prices have skyrocketed, economic growth forecasts have been slashed, food insecurity is back in the spotlight, and access to critical chemicals, aluminum and other products has been curtailed. In response, Asia has been busy implementing a range of measures, from restricting energy use to introducing fuel subsidies, re-starting coal plants, and imposing export restrictions. While the crisis looms large over Asia, the U.S. trade agenda appears to move forward unabated. Adapting U.S. trade asks to reflect the pressures partners are facing — and offering financial support or other cooperation — would build meaningful goodwill in a region Washington cannot afford to lose. With more than 80% of the oil and gas usually passing through the Strait of Hormuz bound for Asia, the region’s energy vulnerability is stark. Energy prices in Asia have risen by almost 70% in some places since the start of the war, forcing countries like Cambodia and Vietnam to ration energy and introduce fuel subsidies. Pakistan and Bangladesh have closed schools, and, across Southeast Asia, officials are working from home and curtailing travel. For tourism-dependent economies like Thailand and Vietnam, surging jet fuel costs and airline service cuts are compounding the damage. In addition, the current situation has prompted several countries in Asia to accelerate their shift to green technologies, which China is well positioned to benefit from given its dominance in this area. Fertilizer supply has also been impacted by the crisis, as one third of global fertilizer supply comes through the Strait of Hormuz. Compounding this, China, another major supplier, has imposed export restrictions. Shortages now threaten countries across South and Southeast Asia, where agriculture employs a large share of the workforce — raising food security risks for economies already under strain. In Japan, there is growing concern about the reduced access to naphtha, a raw material from the Gulf that is needed to make critical medical supplies. Purchasing restrictions have been announced, and Japanese Prime Minister Takaichi has released medical gloves stockpiled for use in a pandemic to alleviate sourcing problems. The semiconductor industry is also not immune, with roughly 45% of sulfur, which is required in chip production, usually coming from Gulf producers. Project...
Iran war dominates ASEAN summit as region reels from economic fallout
MANILA: The growing economic toll of the US-Israeli war on Iran will top the agenda when Southeast Asian leaders meet in the Philippines this week, President Ferdinand Marcos Jr., who will chair ...
US-Iran Conflict Pause Hides Growing Global Economic Shock, Supply ...
US-Iran war pause eases immediate tensions but deepens global economic risks, from energy and supply chains to inflation and financial stability.
