Iran’s closure of the Strait of Hormuz is sending shockwaves through global energy markets, with Asia likely to be hardest hit.
A senior commander in Iran’s Revolutionary Guards said Monday that The Strait of Hormuz had been closed and warned that any vessel attempting to transit the waterway would be targeted, Iranian media reported.
Located between Oman and Iran, the strait is a vital artery for the global oil trade. About 13 million barrels per day passed through it in 2025, representing about 31% of all maritime crude flows, according to energy consultancy Kpler.
A prolonged closure of the strait would likely lead to a further rise in oil priceswith some analysts seeing oil surpassing $100 per barrel. World reference Brent was last up 2.6%, at around $80 a barrel, almost 10% higher since the conflict began.
About 20% of global liquefied natural gas exports from the Persian Gulf are also at risk, mainly those originating from Qatar and shipped through the Strait of Hormuz, according to Kpler. Qatar, one of the world’s largest LNG suppliers, production stopped Monday after Iranian drones struck its facilities in Ras Laffan Industrial City and Mesaieed Industrial City.
“In Asia, Thailand, India, Korea and the Philippines are the most vulnerable to rising oil prices, due to their high dependence on imports, while Malaysia would be a relative beneficiary since it is an energy exporter,” Nomura wrote in a note on Monday.
Here’s how those who rely on Gulf energy and shipments through the Strait of Hormuz are likely to be affected.
South Asia: immediate physical effortSouth Asia would face the most serious disruptions, particularly to LNG supplies, analysts say.
Qatar and the United Arab Emirates account for 99% of Pakistan’s LNG imports, 72% of Bangladesh’s and 53% of India’s, according to Kpler data.
With limited storage and supply flexibility, Pakistan and Bangladesh are particularly vulnerable. On the one hand, Bangladesh already has a significant structural gas deficit. According to the Institute of Energy Economics and Financial Analysisthe country has a deficit of more than 1,300 million cubic feet per day.
“Pakistan and Bangladesh have limited storage and supply flexibility, meaning a disruption would likely trigger rapid demand destruction from the power sector rather than aggressive spot supply,” said Go Katayama, senior analyst at Kpler.
India faces the highest combined risk in the region. “More than half of its LNG imports are Gulf-related and a significant portion is Brent-pegged, so a Hormuz-driven crude price rise would simultaneously increase oil import costs and LNG contract prices. This creates a double physical and financial shock,” he said.
Similarly, about 60% of India’s oil imports come from the Middle East, according to UBP. A prolonged blockade would therefore amplify both the costs of energy imports and the pressures on the current account.
China: significant exposure but sufficient cushionA Hormuz shutdown would challenge China’s energy security, but stocks and alternative supplies provide some buffer.
The country is the the world’s largest importer of crude oiland buys more than 80% of Iranian oil, according to Kpler.
About 30% of its LNG imports come from Qatar and the United Arab Emirates, and about 40% of its oil imports pass through Hormuz, UBP estimates.
“China is materially exposed but more flexible,” said Kpler’s Katayama.
According to Kpler, Chinese LNG stocks at the end of February stood at 7.6 million tonnes, providing short-term cover. However, China will have to compete for Atlantic cargoes if the outage persists, constricting the Pacific basin, Katayama added. In this case, the dynamic could intensify price competition across Asia, even if Beijing avoids real shortages.
Saudi Arabia has increased its crude loadings in recent weeks, and strategic oil reserves held by major consuming countries like China could provide some temporary cushion to the market, Rystad Energy said in a note on Sunday.
UBP said that while China is a significant net energy importer in the region, it is not necessarily the most vulnerable to potential supply shocks.
Japan and South KoreaThe Middle East supplies 75% of Japan’s oil imports and about 70% of Korea’s, according to UBP.
For LNG, their exposure in the Gulf is lower than that in South Asia. South Korea sources 14% of its LNG from Qatar and the United Arab Emirates, while Japan sources 6%, Kpler estimates.
Even without a real shortage, the price effects could be severe. “Economies heavily dependent on energy imports, such as Japan, South Korea and Taiwan, are more exposed to supply shocks,” said Shier Lee Lim, senior macro and currency strategist for APAC at payments platform Convera.
Stocks are also limited. Korea holds about 3.5 million tons of LNG and Japan has about 4.4 million tons of reserves, enough for about two to four weeks of stable demand, according to Kpler.
South Korea’s net oil imports represent 2.7% of gross domestic product, with Nomura ranking it among the most vulnerable on the current account front.
Southeast AsiaIn much of Southeast Asia, the main problem is cost inflation rather than an immediate shortage, industry experts said.
Spot-dependent LNG buyers would face significantly higher replacement costs as Asia competes with Europe for Atlantic cargoes, Kpler’s Katayama said.
Thailand, in particular, is a big oil price loser under Nomura, because the external shock is large and immediate: it has Asia’s largest net oil imports, at 4.7% of GDP, and each 10% increase in the oil price deteriorates the current account by about 0.5 percentage points of the country’s GDP.
