Energy disruptions in the Strait of Hormuz create a cascade effect far beyond fuel prices. The resulting shortages impact petrochemical and fertilizer production, threatening key inputs for everything from manufacturing and electronics to agriculture and basic services like cooking gas for restaurants.
While Asia holds 65-70 days of crude oil reserves, its Liquefied Natural Gas (LNG) buffer is measured in days, not months. With 40% of its LNG sourced from the Middle East, any disruption presents a more immediate and critical threat to power generation and industrial output than an oil shock.
Despite holding 65-70 days of crude oil reserves, Asian governments and industries begin rationing energy as soon as supply chains tighten. This preemptive action means the economic pain of a disruption is felt much sooner than official inventory levels would suggest, making the reserves a poor gauge of immediate impact.