For all the bravado displayed by the Trump administration, Tehran has played its cards well so far in creating global economic distress. The US also failed to comprehend that a large-scale attack on Iran would also make its Gulf allies vulnerable. 

Impact On Asia 

Prolonged closure of the Strait of Hormuz could severely strain the energy markets of Asian economies, potentially triggering acute energy shortages, inflation, and slow economic growth in India, China, Japan, and South Korea. Roughly 82%-84% of oil and 83% of LNG from the Strait of Hormuz pass to Asian markets. 

Nikolai Patrushev, a close confidante of Russian President Vladimir Putin, stated in a recent interview with Russia Today: "The current conflict appears ready to set back the established system of global trade and economic relations for years. Operation ‘Epic Fury’ has indeed become the catalyst for a reshuffling of the global energy market and the collapse of maritime logistics. There is nothing ‘epic’ about this ‘fury’; the world is instead witnessing a tragedy with unpredictable humanitarian and economic consequences."

The US devoted millions of dollars to studying Iran. Its miscalculations are monumental. 

Spike In Oil Prices

A complete shutdown in the Strait of Hormuz could lead to a rapid rise in global energy prices (oil prices spiked 27% in early March 2026 amid the tensions), thereby increasing inflationary pressures across Asia, as seen in South Asian states. 

Major Asian economies rely on the Strait for their energy imports. Over 40% of India's crude and 60% of its LPG imports pass through the Strait. China, Japan, and South Korea together account for nearly two-thirds of the oil and LNG flowing through the channel. 

Economic forecasts suggest that every $10/barrel increase in oil prices could cut India's GDP growth by 0.1-0.2 percentage points and raise inflation by 0.2 percentage points.

Ripple Effects In Asia

As the world's largest crude importer, China receives 38% of the oil shipments transiting the waterway. Although it has substantial strategic reserves and land-based pipelines from Russia and Kazakhstan, a prolonged blockade would be catastrophic for its energy security.

Japan and South Korea are the most vulnerable, as they depend on imported fossil fuels, which account for over 80% of their total energy consumption. Japan imports more than 90% of its oil through the Strait.

Thailand and Vietnam have already implemented energy-saving measures, such as mandatory work-from-home orders for public sector employees, to manage immediate shortages. The Philippines, with its big population, will also feel the pinch.

Seeking Alternatives: The East-West Pipeline

Some global oil companies have sought alternatives, such as using the East-West pipeline, to transport oil from the Persian Gulf directly to the Red Sea through the Saudi Ports.

However, this cannot fully compensate for a major disruption in the Strait of Hormuz.

Shifting Focus To Africa

The focus is now on major African oil producers: Algeria, Angola, and Nigeria. Equatorial Guinea, not often in headlines, is also an oil-producing nation in Africa.

India, which imports oil from Africa, would do well to sign long-term contracts with oil-producing states on a war footing, as other Asian states will also eye these assets.

Similarly, energy imports from Latin America should be prioritised: long-term agreements with Brazil, Colombia, Mexico, and Guyana should be concluded. Argentina can be the answer to India’s requirements in the gas sector. Simultaneously, New Delhi needs to fast-track energy deals with Canada amid the scramble for resources.

(The writer is a commentator on geopolitics and geoeconomics. Views expressed are personal.)