Morgan Stanley analysts warn that Asian economies will bear the brunt of surging oil prices, with Europe and the U.S. facing more moderate impacts. The bank's research note highlights Asia's heavy reliance on imported energy as the key vulnerability, estimating a $10 per barrel increase would cut regional GDP growth by 20-30 basis points.

While inflationary effects across Asia would be manageable, with a 0.4 percentage point impact on consumer prices under full pass-through, the economic hit remains significant. Government subsidies and regulated pricing in some economies would partially offset these effects. By contrast, the U.S. faces a relatively contained impact, with a 10% oil price rise adding about 30 basis points to headline inflation over several months.

The euro area presents a more complex picture, with Morgan Stanley estimating a $10 per barrel increase would reduce GDP by approximately 15 basis points while lifting inflation by 40 basis points. The bank suggests the primary risk from the energy shock may be increased volatility and uncertainty rather than a large growth shock, though Europe's stagflationary dynamic complicates the outlook.