The escalating conflict between Iran and Israel is presenting significant economic challenges for Asia, experts warn. A key concern is the threat to critical trade routes, especially the Strait of Hormuz, through which an estimated 90 percent of Middle Eastern crude oil destined for Asia transits. Since Asia depends on importing more than four-fifths of the crude oil from the Middle East, any disruption could severely impact energy supplies.
Impact on Oil Prices and Markets
The ongoing hostilities have already driven up oil prices, causing negative ripples through Asian stock markets. Increased shipping costs are putting additional strain on supply chains, which could affect:
- Agricultural exports
- Energy security
Effects on Air Travel and Shipping
Airlines like Air India have started avoiding airspace over Iran, Iraq, and Israel, resulting in longer flight durations toward the Gulf, Europe, and North America. Meanwhile, China-Gulf spot rates for shipping have surged by 55 percent in just one month, indicating elevated shipping expenses linked to the conflict.
Risks to Regional Trade and Economic Stability
India’s trade relations with West Asia face heightened risks from potential inflation in oil prices and increased shipping costs. Experts warn that a broader regional conflict could lead to serious damage to Asia’s economic interests and disrupt vital trade ties.
Governments and investors worldwide remain vigilant, closely monitoring developments in the Middle East due to these far-reaching economic consequences.
Stay tuned to Questiqa World News for the latest updates.
About The Author
