Asian energy markets brace for supply disruption as Hormuz shipping faces uncertainty

Asian governments and oil refiners are reviewing crude stockpiles and exploring alternative supply routes as escalating tensions linked to the Iran conflict disrupt shipping activity through the Strait of Hormuz, raising concerns about potential price increases when markets reopen.

Countries across Asia, which depend heavily on Middle Eastern oil exports, are closely monitoring the situation. The region imports roughly two-thirds of its crude from Gulf producers, with major buyers such as China and Japan relying heavily on supplies from the area. Any prolonged interruption could significantly affect energy security and pricing stability.

The Strait of Hormuz - a critical maritime corridor between Iran and Oman - typically sees tankers carrying oil equivalent to about 20 per cent of global consumption. Cargoes from Saudi Arabia, Iraq, Iran, the United Arab Emirates, Kuwait and Qatar routinely pass through the waterway. However, several shipping operators have begun suspending operations around the strait amid rising insurance costs and security risks.

Japanese authorities said shipping companies are temporarily halting movements near the strait, although officials have not reported immediate supply shortages.

In India, refiners have started assessing alternative procurement options as state companies maintain emergency reserves covering around 20 days of crude and LPG consumption.

South Korea has indicated that petroleum reserves jointly held with its national oil corporation could sustain domestic demand for several months if disruptions persist. Authorities said they are prepared to release stockpiled fuel to industries if needed.

Meanwhile, China continues to bolster crude inventories after recording high import volumes, and Taiwan reports that shipments are proceeding as scheduled, with declining dependence on Middle Eastern supplies.

Market analysts expect volatility in oil prices as traders weigh potential supply risks against production adjustments from major exporters.