The closure of the Strait of Hormuz by Iran is reverberating across global energy markets, with Asia poised to bear the brunt of the disruption.
A senior commander of the Islamic Revolutionary Guard Corps said on Monday that the strategic waterway had been shut and warned that any vessel attempting to transit would be targeted, according to Iranian media.
Situated between Oman and Iran, the strait is a critical artery for global oil and gas flows. About 13 million barrels per day moved through the corridor in 2025, accounting for roughly 31 percent of seaborne crude trade, data from energy consultancy Kpler showed.
A sustained blockade could trigger a fresh surge in oil prices, with some analysts projecting crude above $100 per barrel. Global benchmark Brent was last trading around $80 per barrel, up 2.6 percent on the day and nearly 10 percent higher since the conflict escalated.
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Roughly 20 percent of global liquefied natural gas (LNG) exports originating from the Persian Gulf are also exposed, primarily volumes from Qatar shipped via Hormuz. QatarEnergy, one of the world’s largest LNG suppliers, halted production after Iranian drones struck its facilities at Ras Laffan and Mesaieed.
Nomura said Thailand, India, South Korea and the Philippines are among the most vulnerable in Asia due to heavy import dependence, while Malaysia could benefit marginally as a net energy exporter.
South Asia: acute physical and financial stress
South Asia faces the most immediate strain, particularly in LNG supply chains.
Qatar and the United Arab Emirates account for 99 percent of Pakistan’s LNG imports, 72 percent of Bangladesh’s and 53 percent of India’s, according to Kpler data.
With limited storage capacity and constrained procurement flexibility, Pakistan and Bangladesh are especially exposed. Bangladesh is already grappling with a structural gas deficit exceeding 1.3 billion cubic feet per day, according to the Institute for Energy Economics and Financial Analysis.
“Pakistan and Bangladesh have limited storage and procurement flexibility, meaning disruption would likely trigger fast power-sector demand destruction rather than aggressive spot bidding,” said Go Katayama, principal insight analyst at Kpler.
India has the largest combined exposure in the region. More than half of its LNG imports are Gulf-linked and a significant share is Brent-indexed, meaning a crude spike would simultaneously inflate oil import costs and LNG contract prices. Around 60 percent of India’s crude imports originate from the Middle East, amplifying risks to its current account.
China: sizeable exposure, stronger buffers
China, the world’s largest crude importer, is materially exposed but better positioned to absorb short-term shocks.
The country buys more than 80 percent of Iran’s oil exports and relies on the Gulf for roughly 40 percent of its crude imports. About 30 percent of its LNG imports come from Qatar and the UAE.
Kpler estimated China’s LNG inventories stood at 7.6 million tonnes at end-February, providing short-term cover. However, a prolonged outage would force Beijing to compete for Atlantic cargoes, tightening supply in the Pacific basin and intensifying price competition across Asia.
Rystad Energy said increased Saudi crude loadings and strategic petroleum reserves held by major consumers, including China, could offer temporary cushioning.
Japan and South Korea: high oil dependence
The Middle East supplies around 75 percent of Japan’s oil imports and roughly 70 percent of South Korea’s, according to UBP.
LNG exposure to the Gulf is lower than in South Asia, with South Korea sourcing about 14 percent of its LNG from Qatar and the UAE, and Japan about 6 percent.
Even without physical shortages, price effects could be significant. Economies with high energy import reliance such as Japan, South Korea and Taiwan are particularly exposed to supply shocks, analysts said.
Inventory buffers are limited. South Korea holds about 3.5 million tonnes of LNG reserves and Japan around 4.4 million tonnes, enough to cover roughly two to four weeks of stable demand.
Nomura flagged South Korea as especially vulnerable on the current account front, noting that net oil imports account for about 2.7 percent of GDP.
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Southeast Asia: inflationary shock
Across Southeast Asia, the immediate impact is likely to be cost-driven rather than volume-driven.
Spot-reliant LNG buyers would face sharply higher replacement costs as Asia competes with Europe for Atlantic cargoes. Thailand stands out as particularly exposed, with net oil imports equivalent to 4.7 percent of GDP.
Nomura estimated that every 10 percent rise in oil prices could widen Thailand’s current account deficit by around 0.5 percentage point of GDP.
