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On March 2, 2026, a commercial ship anchored off the coast of the United Arab Emirates due to disruption to navigation in the Strait of Hormuz in Dubai.
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Iran’s closure of the Strait of Hormuz is sending shockwaves through global energy markets, with Asia expected to face the greatest pain.
A senior commander of Iran’s Revolutionary Guards said on Monday, The Strait of Hormuz has been closed and warned that any vessel attempting to pass through the waterway would be targeted, Iranian media reports.
The strait, between Oman and Iran, is an important artery for global oil trade. By 2025, about 13 million barrels of oil per day will pass through the port, accounting for about 31% of all seaborne crude oil flows, according to energy consultancy Kpler.
Channel may remain closed for long periods of time causing oil prices to soar furtherSome analysts expect oil prices to top $100 a barrel. global benchmark Brent It last rose 2.6% to around $80 a barrel – a gain of almost 10% since the conflict began.
Kpler said about 20% of global LNG exports from the Gulf are also at risk, mainly gas from Qatar and transported through the Strait of Hormuz. Qatar is one of the world’s largest suppliers of LNG, Stop production On Monday, Iranian drones struck facilities in Ras Laffan Industrial City and Mesaeed Industrial City.
“In Asia, Thailand, India, South Korea and the Philippines are most vulnerable to higher oil prices due to their high reliance on imports, while Malaysia will be a relative beneficiary as it is an energy exporter,” Nomura Securities wrote in a note on Monday.
Here’s how those countries that rely on Gulf energy and shipping through the Strait of Hormuz will be affected.
South Asia: Direct physical stress
Analysts say South Asia will face the most severe disruptions, particularly in LNG supplies.
Qatar and the United Arab Emirates account for 99% of Pakistan’s LNG imports, Bangladesh 72% and India 53%, Kpler data shows.
Pakistan and Bangladesh are particularly vulnerable due to limited storage and procurement flexibility. First, Bangladesh already has a severe structural natural gas shortage. according to Institute of Energy Economics and Financial Analysisthe country’s daily shortage exceeds 1.3 billion cubic feet.
“Pakistan and Bangladesh have limited storage and procurement flexibility, meaning disruptions could trigger a rapid disruption in power sector demand rather than aggressive spot bidding,” Katayama said.
India faces the largest combined risks in the region. “More than half of its LNG imports are Gulf-related, with a large portion linked to the Brent index, so a Hormuz-driven surge in crude oil would push up both oil import costs and LNG contract prices. This would create a dual physical and financial shock,” he said.
Similarly, about 60% of India’s oil imports come from the Middle East, according to UBP. As a result, continued lockdowns will amplify energy import costs and current account pressures.
China: Large exposure but adequate buffers
The closure of the Strait of Hormuz will test China’s energy security, but inventories and alternative supplies provide some buffer.
country is The world’s largest crude oil importerand purchased more than 80% of Iranian oil, according to Kpler.
UBP estimates that about 30% of LNG imports come from Qatar and the United Arab Emirates, and about 40% of oil imports pass through Hormuz.
“China is materially exposed but more nimble,” Kepler’s Katayama said.
Kpler said China’s LNG inventories stood at 7.6 million tons as of the end of February, providing short-term cover. However, Katayama added that if the shutdown persists, China will need to compete for Atlantic cargo, causing tensions in the Pacific basin. In this case, even if Beijing avoids outright shortages, the dynamic could intensify price competition across Asia.
Saudi Arabia has increased crude loadings in recent weeks, while strategic oil reserves held by major consumers such as China may provide some temporary buffer to the market, Rystad Energy said in a report on Sunday.
UBP said that while China is the region’s main net energy importer, it is not necessarily the most vulnerable to potential supply shocks.
Japan, South Korea
According to UBP, the Middle East supplies 75% of Japan’s oil imports and about 70% of South Korea’s oil imports.
For LNG, its Gulf exposure is lower than South Asia. Kpler estimates that 14% of South Korea’s LNG comes from Qatar and the United Arab Emirates, while Japan gets 6%.
Even without outright shortages, the price impact could be severe. “Economies with higher reliance on energy imports, such as Japan, South Korea and Taiwan, are more vulnerable to supply shocks,” said Shier lee Lim, chief macro and currency strategist for Asia Pacific at payments platform Convera.
Inventory is also limited. Kpler said South Korea has about 3.5 million tons of LNG reserves and Japan has about 4.4 million tons of LNG reserves, enough to meet about two to four weeks of stable demand.
South Korea’s net oil imports account for 2.7% of GDP, and Nomura labels it as one of the most vulnerable countries in terms of current account.
Southeast Asia
Industry experts say that in much of Southeast Asia, the first hit will be cost inflation rather than outright shortages.
Kpler’s Katayama said LNG buyers who rely on spot cargoes will face significantly higher replacement costs as Asia competes with Europe for Atlantic cargoes.
In Nomura’s framework, Thailand in particular is a prominent oil price loser because the external hit is large and immediate: it is Asia’s largest net oil importer, accounting for 4.7% of GDP, and every 10% rise in oil prices worsens the current account by about 0.5 percentage point of the country’s GDP.
