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Over 100 days into the US-Israel war against Iran, Asia has emerged as the region most exposed to the global energy shock unleashed by the closure of the Strait of Hormuz, with countries facing soaring fuel bills, rising food prices, inflationary pressures and growing fiscal burdens.
A new factsheet by research group Zero Carbon Analytics (ZCA) showed that the conflict has triggered the largest disruption in the history of the global oil market, sending ripples across energy supply chains, transport systems, agriculture and economic growth.
The Strait of Hormuz, through which a significant share of global oil, gas and fertiliser trade passes, has become a major choke point. Brent crude prices climbed to $138 per barrel during the crisis, while global food prices reached a near three-year high and fertiliser shortages threatened planting seasons across the Northern Hemisphere.
The International Monetary Fund (IMF) cut its 2026 global growth forecast by 0.2 percentage points to 3.1 per cent in April, while the Organisation for Economic Co-operation and Development (OECD) expects global growth to slow from 3.4 per cent in 2025 to 2.8 per cent in 2026. According to OECD, Asian economies including India, South Korea and Thailand are among the most exposed.
Asia is particularly vulnerable because it receives more than half of global liquefied natural gas (LNG) and seaborne crude oil exports passing through the Strait of Hormuz.
Natural gas prices in Asia have recorded the sharpest increases globally since the conflict began. The Japan Korea Marker (JKM), the benchmark for spot LNG prices in Northeast Asia, surged to $22.35 per million British thermal units (MMBtu) on March 19, up 108.4 per cent from the day before the war.
By comparison, Europe's Dutch TTF benchmark peaked at $15.81 per MMBtu, up 99.1 per cent, while US Henry Hub prices remained relatively stable.
As of June 3, Asian LNG benchmark prices remained higher than global benchmark gas and crude prices, highlighting the region's greater exposure to fossil fuel import shocks.
Zero Carbon Analytics found that China, India, Japan and South Korea account for 75 per cent of crude oil exports and 59 per cent of LNG exports moving through the Strait of Hormuz.
Japan and South Korea remain especially vulnerable because imported fossil fuels dominate their energy systems. Oil and gas account for 71 per cent and 78 per cent, respectively, of their fossil fuel imports.
India is among the countries most exposed to the economic fallout. According to the factsheet, if crude oil remains at $100 per barrel for four months, Asia's total fossil fuel subsidy bill would exceed $80 billion. India would bear the heaviest burden among Asia's major economies, facing costs equivalent to 0.7 per cent of GDP and 7.2 per cent of government revenue in fiscal year 2025-26.
India is also highly exposed to disruptions in fertiliser supply chains. About 40 per cent of the country's urea imports originate from the Gulf region, making agriculture vulnerable to rising fertiliser costs and shortages.
The World Bank's fertiliser price index rose more than 12 per cent during the first quarter of 2026, reaching its highest level since October 2022. The index is projected to increase by more than 30 per cent this year.
Globally, 34 per cent of urea trade and 23 per cent of ammonia trade passed through the Strait of Hormuz in 2024. India, the United States, Australia and Brazil are among the largest importers of ammonia from the region.
The pressure is already feeding into food inflation. The United Nations Food and Agriculture Organization's food price index reached its highest monthly level since February 2023, touching a three year high in April 2026.
The consequences of rising fossil fuel prices are being felt across households and businesses. The Philippines recorded the highest inflation increase in the region, with consumer prices in April 2026 standing 7.2 per cent higher than a year earlier. Inflation also accelerated in Vietnam, Thailand, Indonesia, Malaysia and Singapore.
Power tariffs have also risen. Thailand increased electricity prices by 1.8 per cent for the May to August 2026 billing cycle. Pakistan raised power prices by 4.25 per cent in April, while the Philippines' largest utility, Meralco, increased generation charges by 4.86 per cent in May due to higher fuel costs.
Higher fuel prices have also increased transport costs and raised food prices across the region. In the Philippines, the government declared a national energy emergency as food prices rose and transport workers protested surging diesel and petrol costs.
Meanwhile, Indonesia's budget deficit, already at IDR 695 trillion or $40.1 billion in 2025, is expected to widen as the government expands energy subsidies to cushion consumers from higher crude prices.
Malaysia's monthly fuel subsidy bill has climbed to approximately RM5 billion or $1.3 billion, more than seven times pre-war levels. Thailand's Oil Fuel Fund had accumulated a deficit of THB62.4 billion or $1.9 billion by late April.
The energy shock is also driving a rapid policy shift towards clean energy. According to the International Energy Agency, 54 countries have introduced measures to conserve energy and protect consumers since the conflict began.
The Global Energy Crisis Policy Monitor shows that 25 countries and the European Union have announced clean energy and electrification policies, investments and initiatives in response to the crisis.
Asia leads globally, with 14 countries announcing new clean energy measures. Among the most significant actions:
The Philippines activated 250 megawatts of solar capacity and 450 megawatt-hour hours of battery storage on March 30.
Thailand approved a THB5 billion loan programme on April 11 to support rooftop solar installations and electric vehicle purchases.
Indonesia announced plans to replace more than 2,000 diesel power plants with renewable energy facilities and reiterated plans to rapidly deploy 100 gigawatts of solar power.
"The energy crisis has turned the energy transition from a long-term ambition into an immediate national priority to sustain economic growth," said Lam Pham, southeast Asia energy analyst at Ember.