Asia Bears Brunt of Energy Shock as Hormuz Closure Hits Oil Markets

Over 100 days into the US-Israel military campaign against Iran, Asia has emerged as the region most exposed to the resulting global energy shock, with Brent crude prices climbing to $138 per barrel amid the closure of the Strait of Hormuz. A Zero Carbon Analytics factsheet describes the disruption as the largest in the history of the global oil market.

The closure of the Strait of Hormuz — through which a significant share of global oil, gas and fertiliser trade flows — triggered cascading consequences across Asian economies. Soaring fuel costs elevated food prices, added inflationary pressure and increased fiscal burdens for import-dependent nations including India. Global food prices reached a near three-year high during the crisis, according to Zero Carbon Analytics (ZCA), compounding cost-of-living stress for the region's most vulnerable populations.

For India, which imports over 80 percent of its crude oil, the shock exposed the structural vulnerability of an energy system still heavily reliant on Middle Eastern supplies. The crisis has lent renewed urgency to domestic arguments for faster deployment of renewables, energy storage and green hydrogen as buffers against geopolitically driven price spikes. Several Asian governments fast-tracked clean energy procurement to cushion future exposure.

The crisis is expected to accelerate the clean energy push in Asia even as the immediate supply shock stabilises. India's strategic petroleum reserves have been drawn on, and negotiations for alternative crude supply routes have intensified. Analysts at ZCA expect the episode to catalyse lasting policy changes favouring domestic energy production and efficiency standards across the region, given that import-dependent Asian economies bore the largest per-unit economic cost of the disruption.

Key figure — $138 per barrel Brent crude during the crisis