Global oil markets are experiencing extreme strain as the Iran war disrupts energy supplies, with Middle Eastern benchmarks like Dubai and Oman surging to nearly 170 a barrel. While Brent and WTI prices remain lower, the real stress is concentrated in Gulf-origin crude, where spot barrels are trading at record highs. The Strait of Hormuz, through which nearly all regional crude flows, has become a chokepoint for Asian refiners.

Asian economies face the greatest exposure, particularly Japan and South Korea, which historically source 81% and 62% of their oil from the Strait. Countries like India and South Korea have only 73-74 days of inventory cover for Hormuz oil, leaving them vulnerable to prolonged disruptions. Southeast Asian nations including the Philippines, Myanmar, and Vietnam have even thinner cushions and are already implementing rationing and demand-management measures.

Governments across Asia are taking aggressive steps to manage the crisis. Myanmar has imposed alternate-day refueling and anti-hoarding crackdowns, while India has invoked emergency powers to maximize LPG output. China has halted refined fuel exports, and South Korea now requires refiners to meet minimum domestic supply volumes. The US, though better positioned due to domestic production, faces limited options including Strategic Petroleum Reserve releases and Jones Act waivers. Options markets signal further price increases are likely, with June call options averaging 126 a barrel compared to 81 for puts.