Asian Oil Importers Bear Heaviest Costs as Iran Conflict Disrupts Strait of Hormuz Flows

NEW YORK — Disruptions to oil and liquefied natural gas shipments through the Strait of Hormuz linked to the Iran-United States conflict have driven the largest sustained energy price shock in decades, with major Asian importers facing the highest absolute extra costs, according to market data and analyst assessments.

Around 20 million barrels per day of crude oil and oil products, plus roughly 110 billion cubic meters of LNG annually, normally transit the Strait, representing about one-quarter of global seaborne oil trade. Shipping volumes remain well below pre-conflict levels after the war began in late February 2026. Brent crude has traded above $100 a barrel for extended periods and settled as high as $106.65 recently, more than 40 percent above pre-war levels near $75. Asian LNG benchmark prices rose about 80 percent in the first week after the outbreak, while European gas prices rose about 70 percent.

A Centre for Research on Energy and Clean Air analysis of March-to-August 2026 costs identified the largest absolute extra burdens among importers as China ($31.7 billion net across fuels), India ($14.4 billion), Japan ($10.4 billion), France ($10.3 billion) and Italy ($10.0 billion). Relative to economic size, the burden was heavier for lower-income importers such as Egypt (1.33 percent of GDP). South Korea, Spain, the Netherlands, Poland and the United Kingdom also ranked among the top 20 by absolute cost.

"The No. 1 reason why crude oil prices and product prices have not been higher than they are is that China has cut its crude oil imports," said David L. Goldwyn, a former U.S. diplomat and Energy Department official. China reduced imports by as much as 5 million barrels per day at the peak, helping absorb part of the initial shortfall. India, Japan and South Korea, major buyers of Middle Eastern crude, faced elevated freight, insurance and replacement costs as Gulf volumes were constrained.

European importers have been more exposed through refined-product markets. European diesel prices surged more than 70 percent since the conflict began, according to market reports, while the International Energy Agency noted that more than 20 percent of Middle East refining capacity was knocked out. The United States, a net exporter, saw gasoline prices rise to an average of about $4.22 a gallon and diesel approach record levels near $6 a gallon, though the growth impact has been more muted than in pure importers.

Gulf producers themselves have also been affected. Qatar is projected to see its economy contract 8.6 percent this year and Saudi Arabia's economy shrank 4.8 percent in the second quarter, according to International Monetary Fund estimates, amid lost export volumes and higher shipping costs. Emergency stock releases of nearly 400 million barrels by International Energy Agency members, demand reductions and alternative Atlantic Basin supply partially offset the shortfall, but inventories have declined by hundreds of millions of barrels.

No comprehensive official ranking of the 10 most-affected countries has been published by governments or the International Energy Agency. Available data consistently place China, India, Japan, South Korea and several European importers among those facing the largest absolute or relative cost increases from the Hormuz disruption. Prices remain elevated amid ongoing shipping attacks and incomplete recovery of Strait flows.