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Escalating hostilities successful West Asia are heightening risks for India and different Asian commodity importers, arsenic subject strikes and retaliatory attacks disrupt cardinal vigor and commercialized routes, Moody's Analytics said connected Monday (March 2, 2026).
The United States and Israel launched subject strikes connected targets successful Iran implicit the weekend. Tehran retaliated with missiles and drones aimed astatine Israel and countries hosting U.S. forces, including the United Arab Emirates, Qatar, Kuwait, Bahrain, Iraq, Jordan and Saudi Arabia.
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Media reports suggest the struggle has effectively closed the Strait of Hormuz, a cardinal conduit for planetary vigor flows. Roughly one-third of the world's seaborne crude lipid exports and astir 20% of liquefied earthy state shipments transit the constrictive waterway.
India, the world's 3rd largest lipid importer, imports astir fractional of its lipid needs done the constrictive Strait.
"This (closure of Strait of Hormuz) raises the hazard of further disruptions successful the Red Sea and crossed the wider West Asia," Moody's Analytics said. "Airspace closures person compounded the strain, affecting rider question and cargo flows done 1 of the world's astir important commercialized corridors."
Asia is peculiarly exposed arsenic it buys the lion's stock of lipid and state produced successful the region.
"Roughly a 3rd of planetary seaborne crude lipid exports walk done the Strait of Hormuz, with astir volumes destined for ample Asian economies specified arsenic China, India, Japan and South Korea. Around 20% of planetary liquefied earthy state shipments besides transit the strait.
Brent crude lipid prices jumped to astir $80 per tube successful aboriginal Monday (March 2) trading successful Asia, up from astir $72 per tube astatine the adjacent connected Friday, portion equity markets slipped successful archetypal trading.
"Higher commodity prices would rise user and shaper inflation, perchance forcing cardinal banks to intermission their easing cycles oregon adjacent rise argumentation rates," it said. "Higher prices would besides inflate import bills, weakening commercialized balances. As imports go much costly, greater fiscal outflows would weaken currencies."
A broader oregon much drawn-out struggle would hazard expanding the strain connected emerging Asian economies that have, successful past years, struggled with outer indebtedness repayment, it added.
The struggle injects caller uncertainty into the commercialized outlook.
"The struggle complicates matters for India, which imports ample amounts of West Asia lipid and has agreed to upwind down purchases of Russian lipid arsenic portion of a commercialized woody with the U.S. — a woody which present sits successful limbo aft the U.S. Supreme Court struck down US President Donald Trump's country-based tariffs," it said.
Although China is simply a large purchaser of Iran's discounted crude oil, it maintains sizeable reserves that could cushion short-term proviso disruptions. Chinese officials person called for an contiguous cessation of subject operations. But renewed tensions with the U.S. formed a shadiness implicit the upcoming China-U.S. statesmanlike gathering and added uncertainty to their already fragile commercialized truce, Moody's said.
Asia's high-income economies, which heavy trust connected commodity imports, are peculiarly susceptible to the nonstop economical fallout from the conflict. Japan, South Korea, Taiwan (China), Singapore and Hong Kong import much than 80% of the vigor they devour domestically. They besides beryllium heavy connected nutrient imports.
Moody's said the surge successful vigor and nutrient prices aft Russia's penetration of Ukraine played a cardinal relation successful the crises successful Sri Lanka, Bangladesh and Pakistan. "A sustained disruption to Gulf lipid exports oregon maritime postulation could revive indebtedness concerns."
"We are monitoring developments and assessing the implications for our baseline forecast, which we program to people adjacent week", it said.
