This post was originally published on The Economic Times
Last year, as President Donald Trump swung from one erratic tariff policy to the next, Asian economies largely withstood the chaos. That resilience is now under threat as a conflict in the Middle East rapidly escalates, after Trump said that the U.S. military would continue to strike Iran for several weeks.
Concern spiked in many Asian capitals Monday over the disruption to the flow of oil from the Middle East, a region that supplies half or more of the oil that several large economies consume.
In China, Japan, South Korea, Taiwan and India, leaders are focused on the Strait of Hormuz, a narrow shipping corridor on Iran’s southern border through which one-fifth of the world’s supply of oil flows, much of it eventually landing in Asia.
Countries have stockpiles of oil and gas that can see them through the next weeks and months, but a longer war in the region or decision by Iran to blockade the Strait of Hormuz would pose a more serious threat to their economies.
Experts said that Iran was unlikely to try to block the waterway because the country depends on its oil and gas exports to China for revenue. It would also be catastrophic for the global economy,
— Read the rest of this post, which was originally published on The Economic Times.
