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Japan, India, South Korea, China along with a host of other nations are experiencing disruption to their trade from the month-long war in Iran, because of commodity shortages, according to our analysis.
Crude Oil and LNG impact on Southeast Asia
We have identified Crude Oil and LNG as the main commodities impacted from the conflict in the region.
Further analysis can reveal that 64% of all crude oil exports and 96% of all LPG exports in the month of the war are currently trapped in the Strait of Hormuz, and were scheduled to head to the following nations:
- India
- China
- Thailand
- Indonesia
- Japan
- South Korea
- Singapore
- Taiwan
Knock-On Effect of Trade Disruption
In a sign of the war’s potential economic headwinds, commodities such as helium, fertiliser, and aluminium, which are reliant on the Gulf’s energy abundance, are being impacted too.
Further breakdown of the scheduled exports of these commodities from the Gulf, show that 75% of all exports of industrial gases, 49% of fertiliser exports, and 15% of aluminium exports were headed to the same nations.
Southeast Asia sees a hit to monthly trade
Looking at the overall economic picture, the war is making its presence felt in trade figures too. The shortage of these commodities is expected to impact these nations the most:
- Japan (10% drop in trade)
- India (9% drop)
- South Korea (6% drop)
View from Russell
Suki Basi, Managing Director, provided comment:
“The war in Iran has now reached one month, with no end in sight. The disruption to the global economy has been restricted to the nearby regions of Southeast Asia, as our data indicates. Yet, continued disruption to industrial gases such as helium, fertiliser and aluminium will respectively affect AI developments, agriculture, and the wider economy.”
Consequently, there is the possibility that the longer this war drags on, the greater the likelihood of a knock-on effect to the global economy, because of potential shortages of key commodities.
Therefore, it is imperative that businesses and governments start implementing policies and measures to ensure that they are resilient to potential disruptions should this conflict continue.”