The Iran war seen through Asia’s eyes
📁 আন্তর্জাতিক
The real impact of radically reduced supplies, across the array of industries that rely on oil and the customers who depend on their products, has yet to be felt in Europe, leaving an eerie sense of consequences pending.
To the east of the gulf, where transit times to major Asian destinations are shorter and reliance on Middle Eastern oil is much greater, things are already looking very different. South, East and Southeast Asia have long suffered a severe energy deficit, owing to dense populations, high industrial demand for power and uncooperative geology when it comes to oil and gas production.
Around 84% of the oil passing through the Strait of Hormuz is destined for Asia, and economies in South and Southeast Asia in particular are starting to struggle. Relationships with the United States are meanwhile being stress-tested, most of all in South Korea andJapan.
In India, Pakistan, Sri Lanka and Bangladesh, where strategic reserves of oil are relatively modest, people are grappling with strict fuel conservation measures and even, in places, outright rationing.
India has also been hit by serious shortages of Qatari liquefied petroleum gas (LPG) used for cooking, interruptions to cargo and passenger flights that use Gulf airports and a downturn in remittances home by the nine million Indian migrant workers who live in the region – estimated to be worth around $50 billion per year to the Indian economy.
Workers’ remittances are vital, too, for Pakistan’s foreign currency reserves and the stability of the Pakistani rupee.
Both India and Pakistan are trying to secure more oil imports via the Red Sea port of Yanbu, in Saudi Arabia, but analysts worry that even this back-up option could be imperilled if Iran increases its attacks there, or if its Houthi allies enter the conflict.
In an ideal world, oil imports and worker remittances – the two big links between the Gulf and South Asia – complement one another. Lower oil prices make life easier for industry. Higher ones have the opposite effect, but via associated building booms in the Gulf they at least lead to higher remittances home: A great many migrant workers are employed in construction.
In the current conflict, that trade-off risks being replaced by bad news on both counts. India’s prime minister,Narendra Modi, has been broadly supportive of US-Israeli action against Iran, but he is coming under fire at home for failing to have foreseen and prepared for the resulting squeeze on fuel supplies.
In Southeast Asia, thousands of Cambodian gasoline stations were forced to close at the start of the conflict. Cuts to aviation in countries like Vietnam are set to begin in April, after China and Thailand