•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Asia faces a risk of a second energy shock as the Iran conflict escalates, with initial policy responses by Asian governments to the disruption of energy supplies beginning to fade and more severe effects spreading across the region.
When the conflict erupted, many Asian countries moved quickly to address the risk that the Hormuz Strait—an energy lifeline for the region—could be disrupted. Governments implemented measures including reducing electricity consumption even at the cost of industrial output, prioritizing gas for households over the fertilizer sector, and releasing energy reserves to stabilize short-term markets.
Those steps were largely premised on the expectation that the war would end soon and energy flows would normalize. With no clear sign of an end, the fuel crisis has broadened across multiple Asian economies. Airfares, freight costs, and electricity and water bills have risen together, weighing on regional growth.
The United Nations Development Programme (UNDP) estimates that about 8.8 million people are at risk of poverty. It also projects that the conflict could cause up to $299 billion in economic damage for the Asia-Pacific region.
“Countries with the fewest resources to cope, or those least able to pay, will be the first to bear the effects,” said Samantha Gross of the Brookings Institution (US).
Before the conflict began, many Asian governments built budgets on the assumption that oil would average around $70 per barrel. Fuel subsidy programs helped keep price levels stable, but the war has at times pushed Brent crude prices to near $120 per barrel.
Ahmad Rafdi Endut, an independent energy analyst in Kuala Lumpur, said governments face difficult choices: continue maintaining costly subsidies to preserve social stability, or cut subsidies and accept higher costs shifting to citizens.
Endut described the situation as Asia beginning to face a “second wave of impacts.” In India, prioritizing fuel switching to gas for cooking for about 330 million households has reduced supply to fertilizer plants. Fertilizer prices have risen sharply, while the risk of weaker rainfall due to El Niño remains a major concern for the world’s top rice exporter.
India has relied on subsidy programs to shield its 1.4 billion people from energy price shocks. On May 10, Prime Minister Narendra Modi urged citizens to prioritize domestic products and curb foreign travel to conserve foreign exchange. He also called for working from home, using public transport to reduce fuel use, and asked farmers to cut fertilizer use by half.
In the Philippines, the government responded quickly by shifting to a four-day workweek to save fuel and introducing targeted subsidies for low-income households. However, Fitch Ratings noted that most people still bear higher energy costs, slowing business activity in major cities such as Manila.
Thailand abandoned its diesel price cap less than a month after the conflict began due to subsidy fund depletion. The government now faces the need to cut other expenditures to cope with high oil prices while trying to control the budget deficit.
Fuel shortages have also forced financially strapped countries such as Pakistan and Bangladesh to buy oil and gas at current market prices, which are higher and more volatile than long-term contracts. This increases import costs and adds pressure on limited foreign exchange reserves.
Endut said governments may continue subsidizing fuel by reducing spending in other areas such as welfare or by borrowing more, while accepting higher inflation risks.
He also warned that cutting subsidies and passing costs to citizens could trigger voter backlash. Once subsidies dry up and inflation accelerates, many countries may face what he described as a fiscal time bomb.
Asia is unlikely to shed energy pressures quickly. Even if the war ends, global oil trade would not rebound immediately, and restarting production would take time. Repairing damaged infrastructure, re-starting plants, and resuming energy shipments from the Middle East to consuming markets could take weeks or months.
Experts said Europe would face similar effects as Asia but with about a four-week lag. In the United States, consumers are also feeling pressure as gasoline prices rise nationwide.
Henning Gloystein of Eurasia Group said Southeast Asia is currently the hardest-hit region from the energy crisis. “This fuel shortage will get worse,” he warned.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
