Asia Faces $299 Billion Energy Shock as Iran War's Second Wave Hits Growth
Updated
Updated · The Associated Press · May 11
Asia Faces $299 Billion Energy Shock as Iran War's Second Wave Hits Growth
11 articles · Updated · The Associated Press · May 11
$299 billion in losses could hit Asia-Pacific as a second wave of energy shocks from the Iran war drives up utility bills, shipping rates and airfares, with 8.8 million people at risk of falling into poverty.
Brent crude has surged to about $120 a barrel from budget assumptions near $70, leaving governments to choose between extending fuel subsidies that strain finances or cutting them and passing costs to consumers.
India redirected fuel toward cooking gas for 330 million households and is now urging less travel, more remote work and halved fertilizer use, while the Philippines, Thailand and Vietnam are already seeing slower business activity, subsidy stress and flight cuts.
Pakistan and Bangladesh are buying oil and gas at volatile spot prices, adding pressure to thin foreign-exchange reserves and raising the risk of what analysts call a fiscal time bomb once subsidies run out and inflation rises.
Relief is unlikely even if the war ends soon because damaged energy infrastructure and trade flows will take weeks or months to recover, with Southeast Asia seen as the current biggest pain point.
With regional energy pacts failing, will Asian nations hoard resources or forge new, more binding alliances?
As fuel subsidies become a 'fiscal time bomb,' how will governments protect millions from poverty?
Is Asia’s massive pivot to nuclear power a sound security strategy or a rushed, high-stakes gamble?
From Oil Shocks to Food Shortages: The Iran War’s Immediate and Long-Term Impact on Asia
Overview
The ongoing conflict in Iran has unleashed a rapid and deep economic and energy shock across Asia, the world’s most populous continent and a major hub for global manufacturing. This disruption has significant worldwide implications, as it not only affects economies but also brings severe hardship to households and communities. Experts warn that such external shocks can quickly escalate into household crises, with rising energy and food costs, supply chain disruptions, and increased social hardship. The situation highlights Asia’s vulnerability to global crises and the urgent need for resilient strategies to protect both economies and people.