Two months after US President Donald Trump initiated the US-Israeli war against Iran on February 28, the costs of the war are mounting, particularly due to the closure of the Straits of Hormuz. Before the war started, the Strait of Hormuz handled about 20 per cent of worldwide oil transportation and a large share of natural gas shipments. The disruptions to these energy supplies are leading to increased fuel prices, higher electricity costs, rising transportation expenses across the world – and even endanger semiconductor production due to disruptions in the supply of helium following damage to key facilities in Qatar. The Middle East is also a significant producer of fertilisers. In 2024, up to 30% of global fertiliser trade passed through the Strait of Hormuz from the Persian Gulf to export markets worldwide. Disruptions to this supply have severely affected African nations (among others) which rely heavily on imported fertiliser.

The war’s economic impact has been particularly severe in the Asia-Pacific region, which depends heavily on Middle Eastern oil imports. Over 80 per cent of crude oil and LNG passing through the Strait of Hormuz goes to countries in this region, such as China, South Korea and Japan. In 2025, Pakistan, India, and Bangladesh primarily obtained LNG from Qatar and the United Arab Emirates, while Pakistan, Japan, and the Philippines each relied on over 90% of their crude oil imports from the Persian Gulf.  Fuel prices in key Indian cities have surged, with petrol and diesel costs rising by approximately 10-15 per cent over just a few weeks. In Indonesia, nickel producers have reduced output by at least 10 per cent due to shortages of natural gas and sulphur, which are essential for reaching the high temperatures required to extract and refine the metal. Additionally, garment factories in Bangladesh are experiencing severe production disruptions due to shortages of polyester and nylon, which are fossil-fuel byproducts used in clothing manufacturing. Another important impact arises from the disruption of remittances sent home by the millions of workers from South Asia and Africa who work in the Gulf region.

Many observers put the blame for this war on Trump’s personality. Trump’s current foreign policy does not mark a full break from previous policies. The foundation was established by earlier Democratic and Republican governments. The global landscape has significantly evolved over the past thirty years. As a result of the rising economic success of emerging powers and the slowdown of the core economies of Western Europe,........

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