The ongoing conflict in the Middle East is significantly hurting Asia’s oil‑importing economies as high crude prices strain government budgets and consumer costs, reports Wood Mackenzie.
Heavy dependence on Gulf oil—especially via the Strait of Hormuz, which supplies a large share of crude to Asian refineries—leaves the region vulnerable to supply disruptions and elevated energy prices.
Governments are deploying costly measures to shield consumers and key sectors, but prolonged market volatility could push fiscal pressures toward breaking points if prices remain elevated. They write:
A glimmer of hope emerged in week four of the war, with reports of talks between the US and Iran initially pushing Brent below US$100/bbl. […]
The region’s governments have rapidly deployed an unprecedented array of cushions to protect the hardest-hit sectors and consumers. But such interventions come at a staggering cost and, if oil prices remain high, some Asian governments will soon hit fiscal breaking point.
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