The ongoing conflict in the Middle East, particularly the Iran war and the effective closure of the Strait of Hormuz, has had significant repercussions across Asian markets and industries. Since the conflict began in late February, Southeast Asian companies have collectively lost at least $216.9 billion in market value, with sectors such as petrochemicals and tourism among the hardest hit due to the squeeze on oil supply. Thai petrochemical giant Siam Cement experienced an 18% drop in market capitalization during this period, reflecting the broad sell-off in regional equities as investors react to rising energy costs and supply chain disruptions [2].
The metals market has also been severely impacted. On March 30, Iranian drone and missile attacks targeted two of the Gulf's largest aluminum producers, Emirates Global Aluminium (EGA) and Aluminium Bahrain. EGA's Al Taweelah smelter sustained 'significant' damage, injuring several people and disrupting operations. The attacks, combined with the closure of the Strait of Hormuz, have prevented most Gulf firms from exporting aluminum, which accounts for around 9% of global supply. As a result, aluminum futures on the London Metal Exchange surged 5.5% on Monday to $3,492 per tonne, a four-year high, before settling 3.5% higher at $3,381 per tonne. Aluminum prices have risen approximately 10% since the conflict began on February 28. Analysts from S&P Global Energy and Macquarie Group warn that the disruption could push the global aluminum market into a full-year deficit, with production losses estimated at 800 to 900 kilotons in 2026 if the situation persists [4].
Japanese sportswear maker ASICS is also feeling the effects of the conflict. President Mitsuyuki Tominaga warned that if the Middle East situation is prolonged, the company may have to consider raising product prices due to rising transportation costs and potential supply chain impacts. While ASICS is attempting to absorb increased costs internally, Tominaga emphasized there may be limits if the conflict continues [1].
Despite the negative sentiment and market turmoil, there are signs of potential relief. On March 31, U.S. President Donald Trump stated that the U.S. could leave Iran in 'two or three weeks,' raising hopes that the war could end soon. This optimism led to a rebound in Asia-Pacific markets, with Japan's Nikkei 225 and Hong Kong's Hang Seng index futures pointing to stronger opens, and Australia's S&P/ASX 200 rising 1.54%. U.S. crude futures were up 0.44% at $101.81 a barrel. Analysts note that while investor sentiment remains cautious, any diplomatic resolution could help stabilize markets. The Bank of Japan's tankan survey is also being closely watched, with expectations of a marginal increase in business optimism among large manufacturers despite the ongoing conflict [3].
CONCLUSION
The Middle East conflict has caused significant market losses, supply chain disruptions, and commodity price spikes across Asia, with sectors like petrochemicals, tourism, and metals particularly affected. However, recent diplomatic signals have sparked hopes of a resolution, leading to a tentative rebound in market sentiment. The situation remains fluid, and further developments will be closely monitored by investors and industry leaders.