MacroscopeFor Asia, the worst effects of Trump’s war on Iran are yet to come
From tariffs to supply chain disruption, Asian economies reliant on energy imports find themselves cornered between compounding crises
Their impact will fall heavily on Asia, the world’s most energy-import-dependent region and will almost certainly hurt US ally Japan more than it will the US’ main rival, China. Indeed, China may even emerge from the crisis with an enhanced international image.
There is widespread agreement that the assault on Iran by US and Israeli forces was ill advised and ill planned from a global perspective. But its economic and financial consequences are only beginning to be understood.
This is not a typical “oil shock” of the kind endured by Asia and other key regions in recent decades. Its most obvious impact is on energy supply and prices, but it also critically affects petrochemicals, manufacturing supply chains, energy infrastructure and transport networks, as well as financial markets.
Crude oil prices increased by nearly 40 per cent between February and March while the price of liquefied natural gas shipments to Asia rose by almost two-thirds, according to the World Bank.