Governments across Asia are now struggling to find alternative energy\nsources to shield their economies from the worst impacts of the energy\ncrisis triggered by the Iran war. However, these rescue efforts are\nextremely costly and are beginning to burden the budgets of the world\u2019s\nlargest oil-importing countries.<\/p>\n
Citing a Reuters report on Tuesday (05\/05\/2026), supply disruptions\nfrom this conflict have led the Asian Development Bank (ADB) to cut its\neconomic growth projection for developing countries in Asia and the\nPacific to 4.7% this year. Additionally, the ADB has raised its\ninflation outlook for the region to 5.2% for this period.<\/p>\n
Kpler data shows that overall oil imports to Asia, which relies on\n85% of its crude oil shipments from the Gulf, have plummeted by up to\n30% in April compared to the previous year. This drop to the lowest\nlevel since October 2015 follows nearly two months of almost total\nclosure of the Strait of Hormuz, a key route for one-fifth of global oil\nand gas supplies.<\/p>\n
Fiscal pressures are intensifying across the region, particularly in\nSouth Asia, as governments pour billions of US dollars into subsidies\nand duty waivers to offset price hikes. India\u2019s refining sector, for\ninstance, is absorbing losses of about 100 rupees or equivalent to\nUS$1.06 (Rp18,288) per litre for diesel to keep prices stable for\nconsumers.<\/p>\n
Hanna Luchnikava-Schorsch from S&P Global Market Intelligence\nexplained the emergency measures being taken by countries in the Asian\nregion.<\/p>\n
\u201cThe first line of defence is for governments to absorb the initial\nshock by providing subsidies or cutting excise duties on fuel products,\u201d\nsaid Luchnikava-Schorsch.<\/p>\n
Several countries have moved to restrict fuel usage or crack down on\nhoarding, while others are beginning to limit exports. China, the\nworld\u2019s largest oil importer, is attempting to protect itself with large\nreserves and a diversified energy supply chain, although Beijing is\nstill granting export exemptions to some regional buyers.<\/p>\n
Even as Asian governments continue to drain fiscal resources, foreign\nexchange reserves, and oil stocks, Goldman Sachs notes that the economic\nimpact of this war has not been as bad as feared. However, the\ninstitution has still cut its 2026 growth projections for Japan and\nseveral Southeast Asian countries.<\/p>\n
Goldman Sachs analysts in their note question the resilience of the\neconomy seen so far amid dwindling buffer stocks.<\/p>\n
\u201cHow much of the resilience seen so far reflects structural factors\nrather than an unsustainable drawdown of buffer stocks?\u201d the analysts\nwrote.<\/p>\n
Emerging market currencies in Asia are also facing heavy pressure\nagainst the US dollar, with the peso, rupee, and rupiah all hitting new\nrecord lows. Since the war began in late February, the rupiah has\nweakened by more than 2.5%, while the Philippine peso has plunged over\n5%.<\/p>\n
South Asian economies such as Pakistan, Bangladesh, and Sri Lanka are\ndescribed as the most vulnerable to the crisis burden. Pakistan even had\nto pay around US$18.88 per million British thermal units for one LNG\ncargo, or approximately US$30 million (Rp517.59 billion) more expensive\nthan pre-war market prices.<\/p>\n
Hanna Luchnikava-Schorsch again emphasised the vulnerability of these\ncountries in facing global energy price surges.<\/p>\n
\u201cThese countries are using more of their resources to subsidise\ndomestic public energy companies and essentially protecting end\nconsumers from energy price shocks. These are also countries with the\nthinnest fiscal buffers,\u201d added Luchnikava-Schorsch.<\/p>\n
On the other hand, Indonesia as an energy producer has instructed\noperators to prioritise the domestic market over exports and halt\nshipments of non-contracted LNG. Southeast Asia\u2019s largest economy is\nalso starting to look to Africa and Latin America to replace Middle\nEastern oil, and plans to purchase 150 million barrels from Russia by\nthe end of the year.<\/p>\n
Japan, which buys 95% of its oil from the Middle East, has been\nforced to increase purchases from the US at skyrocketing spot market\nprices plus much higher shipping costs. As an emergency measure, on\nFriday, Japan began releasing 36 million barrels of crude oil from its\nnational reserves to maintain domestic supply stability.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/us-iran-war-crisis-hits-asia-heres-how-indonesia-and-others-respond-1778028916", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }