The world’s most consequential stretch of water is 21 nautical miles wide at its narrowest point. Through the Strait of Hormuz approximately 20 million barrels of oil and petroleum products per day flowed in 2025, equivalent to roughly one-fifth of global petroleum liquids consumption and one-quarter of all seaborne oil trade. Qatar alone dispatched over 112 billion cubic meters of liquefied natural gas (LNG) annually through the same passage, representing nearly a fifth of global LNG trade. When the United States and Israel launched coordinated airstrikes on Iran on February 28, 2026, and Iran responded by closing the Strait to non-aligned shipping, a theoretical risk that the military and Intelligence Community had modeled for decades has become reality. The consequences have fallen most heavily on Asia. An estimated 84 percent of the crude oil and condensate transiting the Strait in 2024 was bound for Asian markets, with China, India, Japan, and South Korea together accounting for nearly 70 percent of those flows. While the United States, the largest producer of both oil and gas, and the largest exporter of LNG and oil, has meaningful insulation. Asia, by contrast, has neither the geographic alternatives nor, in many cases, the fiscal resources to absorb a disruption of this scale without structural economic damage.

This article examines how the Hormuz closure is propagating through Asian economies via four channels: petroleum products (crude, gasoline, diesel, jet fuel), liquefied natural gas, industrial chemicals and gases (helium, sulfur, sulfuric acid), and agricultural inputs (nitrogen and phosphate fertilizers). Finally, it turns to the specific macroeconomic and political conditions of six countries, namely: Thailand, Myanmar, the Philippines, India, Bangladesh, and Indonesia – each of which are not just facing fuel shortages and price rises, but wider macroeconomic issues and even domestic political stability.

The most immediate impact was the severance of crude supply to Asian refiners. Tanker traffic through the Strait fell to less than 10 percent of pre-war levels within weeks of the closure. Brent crude surged from approximately $68 per barrel in mid-February to above $120 per barrel by mid-March and the price that Asian and Middle Eastern importers pay for delivered crude reached $132 per barrel by early April. The scale of the physical shortfall was unprecedented. Gulf oil production collectively dropped by at least 10 million barrels per day by mid-March, as Saudi Arabia’s Ras Tanura refinery was forced offline, Kuwait and Iraq curtailed output, and QatarEnergy declared force majeure. Saudi Arabia and the UAE together possess bypass pipeline capacity of roughly 3.5 to 5.5 million barrels per day, but this represents only a fraction of the corridor’s pre-war throughput. The IEA’s coordinated emergency release of 400 million barrels was the largest in its history, but provided roughly 3.3 million barrels per day at maximum drawdown rates, barely a fifth of the daily deficit. Freight rates for oil tankers rose by more than 90 percent from late February, while war-risk insurance premiums surged to levels that prompted some insurers to withdraw Gulf coverage altogether. Airlines began imposing surcharges and canceling routes due to the dual pressure of reduced fuel supply and collapsed tourism demand. Diesel, the fuel of trucks and freight, was also rationed across multiple governments.

Natural gas disruptions added a second, structurally distinct, shock to the first. Qatar, the world’s second-largest LNG exporter, dispatched some 80 percent of its sales to Asian markets before the war, accounting for roughly 20 percent of global LNG trade. Iran’s missile strikes on the Ras Laffan Industrial City in late February knocked approximately 17 percent of Qatar’s LNG export capacity offline. On March 3, QatarEnergy declared force majeure on its export contracts. Asian LNG prices immediately jumped approximately 39 percent, and subsequently surged 140 percent from pre-war levels. Bangladesh, India, and Pakistan imported almost two-thirds of their total LNG supplies via the Strait of Hormuz in 2025. Qatar and the UAE together account for 99 percent of Pakistan’s LNG imports and 72 percent of Bangladesh’s. Natural gas-fired generation accounts for 50 percent of Bangladesh’s electricity mix and 25 percent of Pakistan’s. When LNG cargoes stopped arriving it caused forced reductions in power generation capacity, load-shedding that cascades through manufacturing, and industrial output cuts in gas-intensive sectors including fertilizers and textiles. Countries competing for alternative LNG cargoes found themselves bidding against European buyers who were simultaneously........

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