HONG KONG — The fallout from the U.S.-Israeli war with Iran and the effective closure of the Strait of Hormuz is being felt sharply in Asia, with authorities from New Delhi to Manila implementing emergency measures to shield consumers from mounting shortages and surging oil prices.
On Friday, people in Nepal lined up at gas-filling stations, carrying their empty, red cooking-gas cylinders as the country’s main oil company said it would only fill them halfway with LPG, or liquefied petroleum gas, as it tries to make stocks last longer.
Neighboring India, which is the world’s second-largest importer of LPG after China, is grappling with panic-buying among its own citizens amid wild swings in the price of international Brent crude oil, which as of early Friday was above $100 a barrel.
The unease highlights just how much a region dependent on oil from Gulf nations is affected by the Iran war, which the International Energy Agency says has created the “largest supply disruption in the history of the global oil market.”
Unlike the U.S. or Europe, which have more diverse sources of oil, Asia relies heavily on imports that pass through the Strait of Hormuz, a key shipping route along southern Iran that carries about a fifth of the world’s oil.
“The ability to refine different oils from different places is complicated and not easily shifted in Asia,” Robert Savage, the head of markets strategy and insight at Bank of New York Mellon, told NBC News on Thursday.
Among the countries most affected are Singapore, Thailand, South Korea, Pakistan and Japan, according to a research note Thursday from Eurasia Group, a New York-based geopolitical risk analysis firm.
The escalating conflict in the Middle East has set off an energy frenzy across the continent, forcing governments to ration fuel and scramble for alternative supplies.
In India, which has invoked emergency powers directing refineries to maximize LPG production, oil companies say they are focused on ensuring the stability of domestic supplies, including to essential services such as hospitals.
Though authorities have said the measures are precautionary and that India has plenty of oil, panic-buying threatens to strain domestic resources. “We request everyone not to believe such rumors or crowd fuel stations unnecessarily,” Mumbai-based Bharat Petroleum said on X Saturday.
Even as India struggles to reassure its own population, it is getting additional pressure from its South Asian neighbors.
Bangladesh, Sri Lanka and the Maldives have all requested supplies from New Delhi, Indian foreign ministry spokesperson Randhir Jaiswal said Thursday.
Muslim-majority Bangladesh also closed universities and brought forward the Eid al-Fitr holidays to save electricity and fuel. Worried consumers have flocked to gas stations to fill up their vehicles.
In Southeast Asia, the Philippines has initiated a four-day workweek for government employees, while Vietnam has urged its citizens to work from home and limit vehicle usage.
Thailand said it had halted most of its energy exports, with the country’s energy minister saying fuel reserves would be tripled to 3%. Officials also ordered austerity measures to conserve energy, including having government employees work from home and urging people to use the stairs instead of elevators.
Major Asian airlines, including Air India and Hong Kong’s Cathay Pacific, have almost doubled the fuel surcharge paid by passengers to account for fluctuations in energy prices.
The Iran conflict has been especially brutal for U.S. ally South Korea, which imports 70% of its oil from the Middle East. Its stock markets have had some of the world’s steepest falls this month, with the benchmark Kospi index losing another 2% Friday.
“To offset the impact of higher prices for these fuels, Korea will likely ramp up nuclear and coal-fired power plant production,” the Eurasia Group said. Another U.S. ally, Japan, which imports almost all of its oil from the Gulf, is also vulnerable, though it has significant reserves, it added.
China, which imports nearly a third of its oil through the strait, has urged all parties in the conflict to refrain from disrupting international trade.
Though China imports only about 13% of its oil from Iran, the war there is another blow after the U.S. military operation in Venezuela, another heavily sanctioned country that was supplying Beijing with discounted oil.
If it loses access to discounted oil from both countries, “this will have an important economic impact on China,” said Brenda Shaffer, an energy expert at the U.S. Naval Postgraduate School and a senior fellow at the Atlantic Council’s Global Energy Center in Washington.
The crisis has also extended to Oceania, where Australian authorities said Thursday that fuel quality standards would be relaxed for two months, allowing an additional 100 million liters of fuel a month into the country.
In addition to consumer fuel products, the supply disruption could affect items derived from oil — most notably fertilizer, “which means food inflation worries are going to be on the rise into the summer,” Savage said.
“There is likely an economic slowdown in the works,” he said.
