The Asian energy market will be most affected by a possible total closure of the Strait of Hormuz, with Pakistan, Japan, and China as the three main countries importing oil and other resources from the Persian Gulf, a New York Times report revealed on Tuesday.
The report reveals that in 2024, almost 80% of oil exports from Gulf nations were destined for Asian countries.
While China is the largest buyer in terms of total oil barrels, Pakistan is the economy most dependent on exports from Gulf nations, with most of its energy imports coming through the Strait of Hormuz.
The effect is significant enough to necessitate a four-day workweek, with remote schooling and work when possible, to conserve oil stockpiles and reduce energy consumption in Pakistan. In India, there are reports of a cooking gas shortage, while a state-led fund in Thailand to subsidize fuel costs went into a deficit this month.
Additionally, one problem that affects people around the world, including in these countries, is the significant delays at most airports in Asia due to airlines running low on jet fuel.
Helium crisis might impact economy worldwide
Another Asian country affected by the Strait of Hormuz crisis is Taiwan, not only because of its reliance on oil and energy exports from Gulf states, but because it needs helium and other resources to keep its chip industry running.
A Bloomberg report noted that Taiwan Semiconductor Manufacturing Co., which manufactures 90% of the world's most advanced logic chips, heavily depends on helium and sulfur, both of which are primarily sourced from the Middle East.
The report notes that any severe disruptions to the supply of those resources, or to Taiwan’s electric grid, which is one-third powered by Middle Eastern energy imports, would significantly affect technology markets worldwide.
While the Taiwanese government has said the country has sufficient reserves to sustain the war, there are concerns among specialists and executives about a possible crisis if the conflict continues.
“A disruption in the Strait of Hormuz wouldn’t automatically halt chip production, but it could ripple through power costs, materials supply, and the economics of building AI infrastructure,” Shawn Kim, head of Asia technology research at Morgan Stanley, told Bloomberg.
How the energy crisis impacts the rest of the world
The Times report also notes that the impact on Western countries, especially the US, won’t be as large as in Asia, with most of these nations having access to alternative energy markets outside the Middle East.
The main effect in this case would be that oil prices would continue to rise, which could be reflected in higher fuel and energy prices in these countries.
In Europe, which has been more insulated from the effects of the Middle Eastern energy market, the main response was the lifting of restrictions on the purchase of oil and gas from certain Russian companies.
In Africa, the effects will be unevenly distributed, with many countries depending almost entirely on energy imports from the Middle East, while others, like Nigeria, which is part of the OPEC Plus group and has enough reserves to confront the crisis.