{"id":308990,"date":"2026-03-02T06:06:11","date_gmt":"2026-03-02T06:06:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/308990\/"},"modified":"2026-03-02T06:06:11","modified_gmt":"2026-03-02T06:06:11","slug":"china-seen-among-losers-as-economists-gauge-hit-from-mideast-war","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/308990\/","title":{"rendered":"China seen among losers as economists gauge hit from Mideast war"},"content":{"rendered":"

For the past year, economists have modeled the impact of US President Donald Trump<\/a>\u2019s chaotic trade war. Now, it\u2019s a real war they\u2019re assessing. <\/p>\n

The most immediate impact from the escalating Middle East conflict is through market reaction as investors take flight to safe havens such as the dollar and gold, while stocks slump. That leaves smaller economies \u2014 especially those with scant foreign exchange reserves \u2014 vulnerable.
The main transmission mechanism to the world economy is via oil. Brent rallied as much as 13% to above $82 a barrel \u2014 the highest since January 2025 \u2014 while West Texas Intermediate was near $72 in early Asia trading on Monday.<\/p>\n

\"OilBloomberg
Iran supplies about 5% of global oil, and a complete outage would lift the price by \u200eabout 20%, \u200eBloomberg Economics\u2019s Ziad Daoud and Dina Esfandiary wrote in a report before oil started trading in Asia. Furthermore, about 20% of global oil supply transits through the Strait of Hormuz, and if that\u2019s shut prices could spike to as much as $108 per barrel, they warned.\u200e\"ETLive EventsIf sustained, those higher oil prices would hurt major importers including China, Europe and India, while beneficiaries would include exporters such as Russia, Canada and Norway, the BE analysts wrote in a note. As for the US, consumers would lose out as higher fuel costs squeeze incomes, but the economy overall faces less of a drag as shale has made it an oil exporter.
Of course, much will depend on what happens in coming days, weeks and months. In a separate note, BE analysts said they expect Iran\u2019s response will continue to escalate.
\u201cWhile it can\u2019t match the US\u2019s military superiority, Iran can impose significant costs and seek to bog the US down in the region,\u201d Daoud and Esfandiary along with Becca Wasser and Jennifer Welch wrote.
For a global economy that\u2019s been muddling through Trump\u2019s tariff rollout and growing uncertainty over the impact of Artificial Intelligence on labor markets, the latest spike in Middle East tensions adds yet more uncertainty.<\/p>\n

Chinese refiners would be impacted if Iranian barrels are disrupted, given they import an estimated 99% of Iranian exports, equivalent to about 13% of Chinese seaborne crude imports in 2025, according to analysts at TD Securities including Rich Kelly. <\/p>\n

\u201cThe Middle Kingdom would lose another source of cheap barrels,\u201d they wrote. \u201cRussia stands to benefit with Indian and Chinese demand likely shifting toward heavily discounted Urals, which would ease some pressure on the Kremlin from decreased crude pricing.\u201d<\/p>\n

After US and Israeli military strikes on Iran killed the Islamic Republic\u2019s Supreme Leader Ayatollah Ali Khamenei, Chinese Foreign Minister Wang Yi on Sunday called it \u201cunacceptable to openly kill the leader of a sovereign country and institute regime change.\u201d <\/p>\n

Coming about a month before President Xi Jinping<\/a> is set to host Trump in Beijing, any deterioration in US-Chinese ties risks disrupting a trade truce that has calmed investors on both sides of the Pacific Ocean.<\/p>\n

If broader market upheaval is sustained, those with fewer buffers may prove vulnerable. Analysts at Citigroup say countries with low FX reserves, such as Argentina, Sri Lanka, Pakistan, and Turkey, \u201cface heightened risks of sudden capital outflows and currency depreciation.\u201d<\/p>\n

In a bid to shield the currency, the Turkish central bank announced suspension of its one-week repo auctions due to developments in financial markets, according to a statement by the monetary authority.<\/p>\n

Turkey is also vulnerable to swings in market sentiment due to its trade links with Iran, according to Robin Brooks, who publishes the Shadow Price Macro Substack. \u201cIran is a tiny economy, but \u2014 at the margin \u2014 markets will see this as another reason to be negative on Turkey,\u201d he wrote.<\/p>\n

As for central banks, they\u2019re likely to take a measured approach for now. <\/p>\n

\u201cWhat complicates the near-term further is that there will be a broad-based increase in global uncertainty, which may feed through into the demand side of the economy while inflation expectations pick up,\u201d the TD Securities analysts wrote. \u201cThis argues for patience initially, but a willingness to react if and when the situation stabilizes in the Middle East.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"For the past year, economists have modeled the impact of US President Donald Trump\u2019s chaotic trade war. Now,…\n","protected":false},"author":2,"featured_media":308991,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[168571,138,168568,65,219,168575,168574,168572,168569,111,139,69,168570,168573,4420],"class_list":{"0":"post-308990","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-brent-crude-surge","9":"tag-business","10":"tag-china-oil-imports","11":"tag-donald-trump","12":"tag-economy","13":"tag-energy-price-shock","14":"tag-global-market-volatility","15":"tag-iranian-oil-exports","16":"tag-middle-east-war","17":"tag-new-zealand","18":"tag-newzealand","19":"tag-nz","20":"tag-strait-of-hormuz-disruption","21":"tag-us-china-trade-truce","22":"tag-xi-jinping"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/308990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=308990"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/308990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/308991"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=308990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=308990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=308990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}