Asian governments and refiners are rushing to assess oil stockpiles and alternative supply routes after tensions linked to Iran disrupted shipping through the Strait of Hormuz, a key global energy corridor.
The strait, located between Iran and Oman, carries about 20% of global oil consumption, with cargoes from major producers including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Qatar. Any disruption is expected to push oil prices higher when markets reopen.
Asia is particularly exposed, importing around two-thirds of its crude from the Gulf. About half of China’s oil imports and nearly 90% of Japan’s supplies come from the region.
Shipping Slows, Firms Halt Movements
Several tanker owners, oil majors and trading houses have suspended shipments of crude, fuel and liquefied natural gas through the strait, largely due to rising insurance risks rather than a full blockade.
Japanese shipping firms said they have halted operations around the waterway, although the government reported no immediate disruption to national supplies.
Analysts noted that infrastructure has not been directly hit, but reduced shipping activity is already affecting flows.
India and Others Seek Alternatives
Indian state refiners have begun scouting for alternative crude supplies, according to industry officials. India, the world’s second-largest oil importer, has recently increased reliance on Middle Eastern oil.
Officials said current reserves of crude and liquefied petroleum gas could last about 20 days, offering short-term relief if the situation stabilises.
Stockpiles Cushion Impact Across Asia
South Korea said it could release oil from strategic reserves if disruptions persist, with stockpiles estimated to last up to seven months. Refiners are monitoring whether vessels can continue passing through the strait and are prepared to turn to spot markets if needed.
China has built up crude inventories in recent months, while Taiwan said shipments of oil and liquefied natural gas are continuing as planned, noting that its reliance on Middle Eastern supplies has been gradually declining.
Oil Prices Seen Rising Despite Supply Buffers
Market participants expect oil prices to rise when trading resumes, although the impact may be moderated by potential increases in production from OPEC+ producers.
Analysts said the current disruption reflects heightened risk rather than a complete supply shock, but warned that prolonged tensions could significantly affect global energy markets.
(with inputs from Reuters)
