Morgan Stanley economists warn that liquefied natural gas supply disruptions from the Middle East conflict could pose a greater threat to certain Asian economies than oil supply risks. The economists note that economies dependent on Middle Eastern LNG would struggle to find alternative sources of supply. Storage limitations compound the problem, as most Asian economies maintain limited inventory due to storage challenges.

This supply vulnerability could force affected countries to seek alternative fuels for power generation. The economists suggest that coal offers flexibility to increase consumption rates as a substitute, while industrial sectors may need to reduce energy usage. The analysis highlights how energy security concerns are reshaping strategic planning across the region.

India, Taiwan, South Korea, and Thailand face the highest exposure to these LNG supply risks. These economies combine high dependency on Middle Eastern imports with minimal storage capacity, measured in few inventory days. The findings underscore how regional energy vulnerabilities could intensify as the Middle East conflict continues to disrupt global energy markets.