The ongoing U.S.-Israeli war with Iran and the effective closure of the Strait of Hormuz have triggered a historic disruption in global oil supply, with the International Energy Agency describing it as the 'largest supply disruption in the history of the global oil market' [1]. As the Iran war stretches into its third week, Asian countries, heavily reliant on oil imports passing through the Strait of Hormuz, are experiencing acute shortages and surging oil prices, prompting governments to enact emergency measures [1][2].
In Nepal, citizens queued at gas stations as the main oil company announced it would only fill LPG cylinders halfway to conserve stocks [1]. India, the world's second-largest importer of LPG after China, is facing panic-buying and volatile Brent crude prices, which were above $100 a barrel as of early Friday [1]. Indian authorities have invoked emergency powers, directing refineries to maximize LPG production and prioritize supply to essential services, while urging the public not to panic or crowd fuel stations unnecessarily [1][2]. Additionally, Bangladesh, Sri Lanka, and the Maldives have requested oil supplies from India, with Bangladesh closing universities and advancing Eid al-Fitr holidays to save electricity and fuel [1].
Other Asian nations are also responding with significant policy changes. China ordered refiners to halt exports of gasoline, diesel, and aviation fuel to mitigate domestic shortages, according to sources cited by Reuters [2]. Japan, which imports nearly all its energy, is considering capping gasoline prices at an average of 170 yen ($1.07) per liter, with potential prices reaching 200 yen per liter, and has unilaterally released crude from its stockpiles [2]. Japanese Prime Minister Sanae Takaichi stated these steps are intended to cushion the economic blow from rising fuel costs [2]. South Korea implemented a petroleum price ceiling to curb domestic fuel price volatility, as announced by President Lee Jae Myung [2].
The energy shock has led to a range of austerity measures across Asia, including fuel rationing, four-day work weeks, and encouraging workers to take stairs instead of elevators [1][2]. Singapore, Thailand, South Korea, Pakistan, and Japan are among the most affected countries, according to Eurasia Group [1]. The market implications are severe, with governments scrambling for alternative supplies and imposing price controls to stabilize domestic markets [1][2].
Forward-looking statements from officials and analysts highlight the complexity of shifting oil sources in Asia, as noted by Robert Savage of Bank of New York Mellon, who emphasized that refining different oils is not easily adaptable in the region [1].
CONCLUSION
The Iran war has caused an unprecedented oil supply disruption, forcing Asian governments to implement emergency measures, ration fuel, and impose price controls. With Brent crude prices surging and widespread shortages, the market impact is high and ongoing, as authorities seek to stabilize supplies and cushion economic fallout. The situation remains volatile, with further policy responses likely as the conflict continues.