Asian economies face severe fallout from Iran conflict
Updated
Updated · Fortune · May 2
Asian economies face severe fallout from Iran conflict
12 articles · Updated · Fortune · May 2
Energy prices have jumped nearly 70% in some Asian markets, while the IMF says regional growth will slow 0.6% from 2025, with India, Vietnam and Thailand hit harder.
Cambodia and Vietnam are rationing energy and subsidising fuel; Pakistan and Bangladesh have shut schools, while fertilizer, naphtha and sulfur shortages threaten food supplies, medical goods and chip production.
ASEAN ministers called for closer coordination, the Philippines proposed joint oil stockpiling, and Japan offered financial support as governments juggle crisis measures with US trade demands and a faster shift to green technology.
With fuel subsidies draining national budgets across Asia, which countries are closest to a breaking point like Indonesia's 1998 crisis?
As Washington's trade policy clashes with Asia's crisis, is Beijing becoming the region's new indispensable economic partner?
The Strait of Hormuz is crippled. What permanent changes to global energy and food supply chains will emerge from the chaos?
Strait of Hormuz Blockade 2026: Global Energy Shock and Asia’s Economic Crisis
Overview
In late February 2026, U.S. and Israeli strikes on Iran triggered Iran's retaliation, including a blockade of the Strait of Hormuz, a vital route for 13 million barrels of oil and significant gas exports. This blockade caused global oil and gas prices to surge above $100 a barrel by March, sparking inflation and economic slowdowns across Asia. Countries like Japan faced sharp price increases in petrochemicals, while Pakistan and Cambodia saw downgraded growth forecasts. The crisis pushed China to seek alternative energy sources and accelerated global shifts toward renewable energy. Governments responded with energy conservation campaigns, subsidies, and financial aid, but long-term energy security challenges remain.