Asian economies are scrambling to manage rising fuel costs and conserve energy as US-Israeli strikes on Iran disrupt one of the world’s most critical energy corridors.<\/p>\n
Roughly a fifth of global oil supply transits through the Strait of Hormuz, a narrow waterway linking the Gulf to international markets, with most of it heading east.<\/p>\n
China, India, Japan and countries in Southeast Asia are the largest consumers, importing about 80% of the oil that passes through the Strait and accounting for roughly half of East Asia\u2019s imported oil.<\/p>\n
Following Iran\u2019s closure of the Strait of Hormuz on 2 March, tanker traffic plunged and at least 15 vessels were under attack. However, supplies have not been completely disrupted, with many tankers still arriving across Asia.<\/p>\n
While energy continues to trickle into Asia, some countries are already feeling the strain.<\/p>\n
Pakistan, which relies heavily on imported oil and gas for transport, has seen petrol prices surge by nearly 20% since the attacks began on 28 February.<\/p>\n
Businesses are also facing higher costs and increased absenteeism as workers try to save on fuel, according to energy analyst Osama Rizvi.<\/p>\n
“We are seeing a jump in food prices. Also, uncertainty is rife. For the common man, who spends more than 51% of his income on basic food items, such conditions hint towards an impending doom,” he added.<\/p>\n
Authorities have responded with measures including a 50% cut in fuel use for government vehicles and a 60% reduction in the number of such vehicles on the road.<\/p>\n
Vietnam has also encouraged remote working to reduce fuel consumption while drawing on price stabilisation funds.<\/p>\n
Concerns are mounting as Gulf states halt operations at key facilities, including QatarEnergy, Saudi Arabia\u2019s Aramco and Bahrain\u2019s Bapco Energies, further constraining supply.<\/p>\n
In the event of a full shutdown of Middle Eastern oil flows, countries would need to draw on reserves, though levels vary widely. Pakistan\u2019s reserves are estimated to last 28 days.<\/p>\n
China appears better positioned, with strategic reserves covering roughly 120 days.<\/p>\n
“There are additional corporate reserves that provide a further buffer,” Dan Wang, China Director at Eurasia Group noted.<\/p>\n
“I’ve been talking to a lot of Chinese state-owned companies, they sound quite confident that China can shield this risk,” the economist added.<\/p>\n
Analysts such as Wang say a prolonged and complete shutdown is unlikely, as exporters themselves depend on the route.<\/p>\n
\u201cEven if tensions continue, there will likely be some guaranteed shipments because exporters themselves rely on this route,\u201d the economist added.<\/p>\n
China\u2019s reliance on Iranian oil sits at around 13% but accounts for roughly 90% of Iran\u2019s exports. Iran is also able to bypass the Strait of Hormuz.<\/p>\n
Albeit less efficient, the Jask Oil Terminal in Iran, built specifically to route exports around the Strait of Hormuz, has resumed exports, loading about two million barrels on 7 March, according to Kpler.<\/p>\n