Governments worldwide are scrambling to contain the economic fallout of the escalating Middle East conflict, as disruptions to energy supplies, rising fuel prices and market volatility ripple across global economies. From emergency tax cuts to energy policy shifts, countries are moving swiftly to shield consumers and stabilise markets.
Kuwait says port damaged
Kuwait’s main commercial port has been damaged in a drone attack, authorities said, as Iran continues its campaign in the Gulf in retaliation for US-Israeli strikes.
Shuwaikh Port was targeted at dawn “by enemy drones”; preliminary reports indicate material damage but no casualties, the Kuwait Ports Authority said in a statement on X.
Vietnam waives green tax
Vietnam has temporarily waived an environmental tax on fuel in a bid to cut soaring petrol prices by more than a quarter, the trade ministry said.
The environmental protection tax on petrol, diesel and aviation fuel will be reduced to zero from Friday until 15 April.
“This is considered an urgent and effective solution to stabilise the petroleum market and ensure national energy security amid the escalating conflict in the Strait of Hormuz, which is creating the ‘biggest energy bottleneck ever’,” the ministry said.
Oil rises
Oil prices edged higher on Friday even as US President Donald Trump delayed a deadline for Iran to reopen the Strait of Hormuz.
Brent crude rose 0.75% to $108.82 a barrel at 0230 GMT, while West Texas Intermediate gained 0.35% to $94.81.
Brent has surged nearly 50% since the war began, while WTI is up around 40%.
Stock markets across Asia were mixed.
Cryptocurrencies aiding Iran
Iran has seen significant cryptocurrency flows since the outbreak of the conflict.
Experts say digital assets are being used both to circumvent sanctions on Iran’s Revolutionary Guards and as a financial safe haven for civilians facing soaring inflation.
In a notably large movement, more than $10 million worth of cryptocurrencies left Iranian exchanges between 28 February — the first day of Israeli-US airstrikes — and 2 March, according to analytics firm Chainalysis.
Japan to ease coal restrictions
Japan plans to temporarily ease restrictions on coal-fired power plants as it seeks to address an energy crunch triggered by the war, an official said.
Operators had been required to keep output at or below 50% for high-emission plants. However, the government now intends to allow full operation of older, less efficient facilities for one year from April, said industry ministry official Takahide Soeda.
India cuts fuel taxes
India has reduced taxes on petrol and diesel, Finance Minister Nirmala Sitharaman announced.
The country, which imports over 85% of its crude oil, has cut fuel duties by 10 rupees ($0.11) per litre to “protect consumers from rising prices”.
World Bank to respond ‘at scale’
The World Bank said it is ready to provide immediate financial support to emerging economies affected by the crisis, adding it is “ready to respond at scale”.
The Washington-based lender said several countries had already sought assistance as commodity prices and supply chains come under pressure.
Spain approves war-impact measures
Spain’s parliament has approved a €5 billion ($5.8 billion) package aimed at cushioning the economic impact of the conflict, including significant reductions in energy taxes.
Poland cuts fuel taxes
Poland has announced measures to ease the burden of rising fuel costs, including tax cuts and price controls.
Prime Minister Donald Tusk said VAT on petrol and diesel will be reduced from 23% to 8%, while daily price caps will be set by the energy ministry.
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