Such has been the intensity of events in the Persian Gulf, and the relentlessness of the media coverage, that the Iran war can feel older than it is. In fact, some of the oil tankers that left the Middle East before the closure of the Strait of Hormuz have yet to reach their destinations in Europe.
The real impact of radically reduced supplies, across the array of industries that rely on oil and the customers who depend on their products, has yet to be felt in Europe, leaving an eerie sense of consequences pending.
To the east of the gulf, where transit times to major Asian destinations are shorter and reliance on Middle Eastern oil is much greater, things are already looking very different. South, East and Southeast Asia have long suffered a severe energy deficit, owing to dense populations, high industrial demand for power and uncooperative geology when it comes to oil and gas production.
Around 84% of the oil passing through the Strait of Hormuz is destined for Asia, and economies in South and Southeast Asia in particular are starting to struggle. Relationships with the United States are meanwhile being stress-tested, most of all in South Korea and Japan.
South Asia
In India, Pakistan, Sri Lanka and Bangladesh, where strategic reserves of oil are relatively modest, people are grappling with strict fuel conservation measures and even, in places, outright rationing.
India has also been hit by serious shortages of Qatari liquefied petroleum gas (LPG) used for cooking, interruptions to cargo and passenger flights that use Gulf airports and a downturn in remittances home by the nine million Indian migrant workers who live in the region – estimated to be worth around $50 billion per year to the Indian economy.
Workers’ remittances are vital, too, for Pakistan’s foreign currency reserves and the stability of the Pakistani rupee.
Both India and Pakistan are trying to secure more oil imports via the Red Sea port of Yanbu, in Saudi Arabia, but analysts worry that even this back-up option could be imperilled if Iran increases its attacks there, or if its Houthi allies enter the conflict.
In an ideal world, oil imports and worker remittances – the two big links between the Gulf and South Asia – complement one another. Lower oil prices make life easier for industry. Higher ones have the opposite effect, but via associated building booms in the Gulf they at least lead to higher remittances home: A great many migrant workers are employed in construction.
In the current conflict, that trade-off risks being replaced by bad news on both counts. India’s prime minister, Narendra Modi, has been broadly supportive of US-Israeli action against Iran, but he is coming under fire at home for failing to have foreseen and prepared for the resulting squeeze on fuel supplies.
Southeast Asia
In Southeast Asia, thousands of Cambodian gasoline stations were forced to close at the start of the conflict. Cuts to aviation in countries like Vietnam are set to begin in April, after China and Thailand – both major refiners of oil for jet fuel – halted exports.
In Malaysia, fertiliser production is slowing and sale prices are rising. That will soon hit the cost of Malaysian palm oil, used across the world in everything from cosmetics to packaged foods.
Government workers in the Philippines, where a national energy emergency has been declared, are being encouraged to work from home one day per week if they can, to save on fuel.
Right across the region, the pressure to pivot to renewable energy seems set to grow. Laos, Cambodia and Vietnam have been leading the way in recent years via hydropower projects in the Mekong River Basin, but many of these are controversial because of the way dramatic changes to river-flow imperil the livelihoods of farmers and fishermen.
Korea
While India tries to insulate itself against chaos in the Gulf by upping its imports of crude oil from Russia – developing a profitable new sideline in refining it and exporting fuel to Europe and elsewhere – South Korea finds itself with fewer obvious solutions to hand. An estimated 70 per cent of its crude oil and half of its naphtha – used, among other things, to make plastics for the electronics and car industries – comes in via the Strait of Hormuz.
The Gulf has been essential to the Korean economy since the 1970s, when construction firms began securing major contracts for infrastructure projects, including highways and a harbor in Saudi Arabia alongside a shipyard in Iran. Before Hyundai was a household name in the car market, it was one of those construction firms, sending tens of thousands of Korean workers to the Gulf and helping to earn much-needed foreign currency for South Korea.
Lucrative nuclear power projects followed, contributing to such strong Gulf relationships that Korea avoided opening an embassy in Israel until 1993 – for fear of alienating its economic allies – and even put up with Iran developing a strategic relationship with North Korea.
Compounding South Korea’s economic worries now is potential strain on its relationship with the United States, a close ally that has around 28,500 troops stationed on Korean soil. Aware of South Korea’s reliance on the Strait of Hormuz, Donald Trump recently included it on a list of countries from which he expects help in securing that crucial stretch of water.
So far, the Koreans’ response has been to insist that no official request for help has been received (social media posts, they say, don’t count). The government has also signed an artfully vague joint statement issued by a handful of leading nations, confirming their readiness “to contribute to appropriate efforts to ensure safe passage through the Strait.”
Any deployment of military assets would require approval from South Korea’s National Assembly. And that is far from guaranteed unless such a deployment could reliably be confined to peacekeeping and operations to support freedom of navigation.
Japan
Another of the signatories to that joint statement is Japan, which is even more exposed than South Korea to the crisis in the Gulf: Some 90% of Japan’s crude oil is imported via the Strait of Hormuz, originating largely in Saudi Arabia and the UAE.
After the oil shock of 1973 exposed Japan’s vulnerability to the region’s fractious politics, measures were put in place to create a strategic oil reserve. It is now one of the world’s largest, capable of sustaining the country’s considerable needs for 254 days. Japan’s Prime Minister Sanae Takaichi has just begun dipping into it.
That doesn’t, however, solve Japan’s long-term problem: its continued reliance on a single region of the world, not to mention a single narrow waterway, for an enormous proportion of its energy needs. The problem has become more acute over the past 15 years.
The disaster at Fukushima in 2011 prompted the shutdown, for safety checks, of Japan’s nuclear reactors. Fewer than half have since been restored to service, such has been the level of public concern.
Then came Russia’s war in Ukraine, raising the global price of oil. Takaichi has announced plans to buy and stockpile more US oil. But transport costs and incompatibility with Japanese refineries mean that American energy is not a sustainable solution.
Alongside economic worries for Japan run political ones, mirroring those of South Korea. Japan’s strategic alliance with the United States is indispensable, and yet Trump’s demands for help in Hormuz will be very difficult to meet. Japan’s American-authored postwar constitution with associated legislation places strict limits on the circumstances in which Japanese forces can be deployed abroad.
Shinzo Abe, Japan’s longest-serving prime minister and an important mentor for the present PM, sought instead to find a role for his country as a trusted international intermediary. In 2019, he travelled to Tehran to meet the Iranian president, hoping to help ease tensions in the region and stave off war.
That now seems like the distant past. So far, however, Prime Minister Takaichi is playing a difficult hand well, promising Trump that she will “check” what Japan can do for him in the Gulf while reminding him during a visit to the White House last week that her country’s American-authored constitution ties her hands.
No doubt thinking about the post-Trump future, as a good long-term ally must, her government has avoided public criticism of US-Israeli action against Iran and refrained from commenting on its legality under international law. In a sign of the delicate balance being sought, the Japanese defense minister shortly after the war began tried and, critics said, failed to explain the government’s position.
As with South Korea, it is possible that Japan may send military ships to help out in the Strait if and when peace returns. Japan possesses minesweeping capabilities of the kind that might become useful, and a peacetime role for the Japanese Self-Defence Forces (SDF) in assisting navigation through the Strait could conceivably be pitched to the Japanese public as part of a broader commitment to maintaining freedom of the seas around the world.
This is very much a live issue in East and Southeast Asia, where China has recently been caught once again dredging and island-building around the Paracel Islands, located between China and Vietnam.
One of the reasons why Takaichi emerged from her Oval Office encounter with President Trump relatively unscathed may be that she and her officials managed to persuade him of the bigger picture.
The US and Japan are agreed that the latter must spend more on defense and become more assertive in East Asia, but Takaichi needs time and space to prepare the ground and sell this to the Japanese public. She has fast-tracked a review of key national security documents, and has refused to rule out reconsideration of Japan’s historic opposition to allowing nuclear weapons to transit through its territory – a point of contention for many years with the US, given the limits it places on American operations in Japan.
Deploying the SDF to a war zone would be disastrous for the delicate maneuvers that Takaichi must make.
The China factor
Tokyo and Seoul are meanwhile united in worrying about another recent development caused by the conflict in Iran: the redeployment of American artillery batteries, air defense weapons, ships and marines from the Indo-Pacific region to the Middle East.
None of this yet appears extensive enough to alter the balance of deterrence with China and North Korea, but it is being seen as a possible sign of things to come: the US taking its traditional East Asian allies for granted in the pursuit of larger or more pressing interests.
The Japanese in particular are keen to ensure that when Donald Trump makes his delayed visit to Beijing, his desire to establish – and advertise to the world’s media – a strong working relationship with Xi Jinping does not lead to Japan’s interests being forgotten.
China’s response to the Iran crisis, in both the short and long term, is perhaps the greatest and most consequential unknown for Asia.
Analysts who are inclined to credit the Trump administration with a degree of strategic intelligence and foresight wonder whether China may even be the ultimate target of the current hostilities – whether war in West Asia is a proxy for war in East Asia. Some argue, with this in mind, that the de facto closure of the Strait of Hormuz is less an unexpected outcome of the US-Israeli strikes and more an intended effect.
That argument begins on the other side of the world, in South America. Back in January, the US launched its audacious operation to capture the Venezuelan leader Nicolas Maduro. Some put this down to a fit of presidential pique after Maduro repeatedly insulted President Trump, calling him a warmonger and appearing to imitate his famous, gurning dancing style. Others hailed a new Monroe Doctrine – inevitably dubbed the Donroe Doctrine – according to which Trump’s priority in his second term is to secure the United States’ hold on the Americas.
But still others have discerned an opening move in what commentators call Cold War 2.0: a desire to exert greater control over China’s energy supply. Voices inside the Trump administration appeared to confirm this rationale around the time of the Venezuela operation, claiming that the president had had enough of China using debt as leverage for obtaining cheap oil from South America. Trump himself put it this way: “I told China and I told Russia, ‘We get along with you very well, we like you very much, we don’t want you [in Venezuela], you’re not gonna be there.'”
Trump much preferred that China buy its oil from the United States, serving as a broker both for US and Venezuelan supplies. Now, so the argument goes, he is seeking long-term leverage over oil that travels through the Strait of Hormuz.
How, after all, could the Strait’s closure by Iran – regarded for decades as a near-certainty in the event of all-out war in the Gulf – genuinely have taken American planners by surprise? China is famous for avoiding reliance on any one country for more than 20 per cent of its oil. But disruption to Gulf supplies, especially if the United States somehow gains control over Iranian exports, would have a serious impact on Chinese heavy industry in particular.
One of the more outlandish claims being made of late is that by striking Iran, the US hopes to kneecap China’s progress in AI. It is becoming a staple of geostrategic thinking that whoever “wins” at AI will hold the rest of the world at its mercy. And though analysts have so far focused on the advanced components and rare earth materials required for artificial intelligence, it is also a notoriously energy-hungry endeavor.
Back in January, the Brookings Institution predicted that the energy required to power the AI race between the United States and China “will have spillover effects far beyond their borders.” One of the contributors to that piece suggested that while the US is currently more effective at securing semiconductors, China is better-placed to generate the stupendous amounts of electricity required to run AI data centers and support the application of AI in advanced economies. By squeezing China’s energy supply, the US may be able to give itself an advantage.
On present evidence, the idea that the Iran war is an AI gamble appears far-fetched. China has made itself the global leader in renewables, including solar and wind, developing partnerships with countries like Saudi Arabia and generating as much as 31 per cent of its domestic electricity supply this way. It also makes heavy use of coal to generate electricity, while sitting on an ocean-sized oil reserve of up to 1.4 billion barrels.
Admittedly, it is all but impossible to disentangle Trump’s brash and contradictory social media pronouncements from his real intentions, let alone whatever US officials might be thinking and planning behind the scenes. But if the Iran war were aimed at China, why would Trump be allowing a limited amount of Iranian oil to reach customers – of whom the largest by far is China?
It seems at least as likely that Trump hopes to keep China happy, and out of the conflict. And it may be that the Iran war ends up benefitting China, by persuading countries like the UK – where enthusiasm for clean energy among policymakers has wavered in recent years – that it is time to go full steam ahead for renewables, seeking out Chinese know-how to speed the process.
There are signs, meanwhile, that China is seeking to leverage the energy emergency in Asia to increase its influence in the region. It has begun offering Taiwan and various Southeast Asian countries “energy security” in exchange for political favors – in Taiwan’s case, ending its opposition to full inclusion in the People’s Republic. In time, for countries around the world where views of the United States have long been mixed, China may come to be seen as the “adult in the room” in global affairs.
Strategic confusions aside, the US is not helping itself in the way that it communicates with people at home and abroad. The launching of military action by the United States used to be marked by a tempering of aggressive confidence with sobriety and even solemn regret at having to resort to the use of force. Compare that with the gung-ho press conference performances, bordering on caricature, given by Secretary of War Pete Hegseth. Or White House social media videos splicing footage of attacks on Iranian targets with scenes from action films including Iron Man, Top Gun and Gladiator, alongside the computer games Grand Theft Auto and Mortal Kombat.
One of the great unknowns in Asia is whether Chinese restraint on the world stage up until now is inspired by a genuine reluctance to intervene in other countries’ affairs – in contrast to the modern West – or by a certain caution born of not yet having the military means to back threats with actions.
If the latter turns out to be the case, then one possible contribution to Asia’s future of the present war – regardless of how it turns out – may be irreparable damage to respect for international law, thanks to the rather thin claims made about the necessity of ‘pre-emptive’ action against Iran (when peace talks were ongoing and appeared to be progressing).
For countries like Japan, international law and freedom of the seas are at once articles of faith and pragmatic essentials. The very last thing they want to see is a return to a world where everything turns on energy, weaponry and the willingness to deploy both without restraint.
Christopher Harding is a cultural historian specializing in modern Japan and India. He is a senior lecturer in Asian history at the University of Edinburgh and he writes a weekly newsletter about Japan that can be found here.
This article, originally published by Engelsberg Ideas, is republished with permission.