Strait of Hormuz Shutdown Shakes Asian Energy Markets

The effective closure of the Strait of Hormuz, following joint US-Israeli strikes on Iran that led to retaliatory actions, has halted tanker traffic through this critical oil chokepoint, triggering an unprecedented energy supply crisis. Supertanker charter costs have surged, and major shipping companies have withdrawn due to the lack of war-risk insurance coverage. Asian economies are the most exposed, as approximately 84% of crude oil and 83% of LNG transiting the Strait in 2024 were destined for Asian markets, with China, India, Japan, and South Korea accounting for about 75% of oil flows. Japan and South Korea are particularly vulnerable due to high fossil fuel import dependency, though they hold significant oil reserves as a short-term buffer. However, their limited LNG storage capacity makes gas shortages an immediate threat if the closure persists. Oil prices have risen, and analysts predict further increases if the standoff continues, as alternative bypass routes offer insufficient capacity. The crisis highlights the fragility of current energy supply chains for Asia.

(Source：BeInCrypto)