Factsheet: Ripple effects 100 days into the Iran energy crisis

Key points

• At the 100-day mark of the Iran war, the Strait of Hormuz closure has driven shocks across the global economy. 
• Brent crude reached USD 138/barrel, food prices hit a near three-year high and fertiliser shortages threaten planting season in the Northern Hemisphere.
• The IMF cut its 2026 growth forecast by 0.22%, the OECD said global GDP growth is expected to slow from 3.4% in 2025 to 2.8% in 2026, with many Asian countries, such as South Korea, India and Thailand, among the most exposed.
• Asia has seen the highest peak in natural gas prices during the war to date, underscoring the risk of fossil fuel import dependence in the region.  
• Globally, 26 countries and regions have released clean energy and electrification measures, such as increasing investments in solar and grids, in response to the war, according to the Global Energy Crisis Policy Monitor. Countries in Asia have released the most measures globally.
• Asia is the region most vulnerable to disruptions in the Strait of Hormuz, receiving more than half of LNG and seaborne crude oil exports from the critical shipping point. 
• In Asia, the war has increased fossil fuel subsidies and budget deficits, as well as power prices, food and transport costs for everyday consumers. 
• On the other hand, since the war began, clean technology investments have surged in Asia, according to the International Energy Agency and Ember. 

The Iran war has caused an energy crisis, with ripple effects globally

As the Iran war reaches the 100-day mark and the humanitarian toll mounts, the effective closure of the Strait of Hormuz has been felt across the globe in consumer prices, energy supply, supply chains, macroeconomics and policy responses.

Energy and fuel prices have spiked

• The IEA has called this the ‘largest supply disruption in the history of the global oil market’. 
• Since the start of the Iran war, LNG Japan/Korea Marker (JKM) prices – the benchmark for spot market LNG prices in Northeast Asia – rose to as high as USD 22.35 per MMBtu on March 19, up 108.4% from a day before the war, the highest peak in prices across all regions. 
• Dutch TTF natural gas prices – the benchmark for gas prices in Europe – peaked at USD 15.81 per MMBtu on March 19, up 99.1% from a day before the war. US Henry Hub prices – the benchmark for gas prices in the US – have remained relatively stable. 
• As of 3 June, JKM prices were higher than benchmark natural gas and crude prices globally, indicating that Asia is facing higher impacts from the global surge in gas prices. 

Figure 1

Rising fuel prices have impacted fertiliser supply chains and food prices

• The World Bank Group’s fertiliser price index rose over 12% in Q1 2026, reaching its highest level since October 2022, as the planting season began in the Northern Hemisphere. The index is projected to rise by over 30% in 2026.
• The UN FAO food price index reached a three-year high in April 2026, rising to the highest monthly level since February 2023.  
• 34% of global urea trade and 23% of global ammonia trade passed through the Strait of Hormuz in 2024, coming from five major exporters – Iran, Qatar, Saudi Arabia, the UAE and Bahrain. As well as exports of fertiliser itself, the supply chain is vulnerable to disruptions to natural gas, which is used to produce ammonia used in nitrogen fertilisers.
• India, the US, Australia and Brazil rely on the largest quantities of ammonia from the region. A number of low-income countries, including Mozambique, Sudan, Somalia and Tanzania, also import a substantial portion of their fertiliser through the Persian Gulf. 

Figure 2

Fallout from the war is slowing global economic growth

• The IMF downgraded its 2026 global growth forecast to 3.1% in April 2026, a 0.2 percentage point reduction from its January projection, adding concern over debt distress.
• The OECD said global GDP growth is expected to slow from 3.4% in 2025 to 2.8% in 2026, with many Asian countries such as South Korea, India and Thailand among the most exposed.

In response, countries are enacting clean energy measures 

Figure 3

Many countries are recognising that as well as contributing to climate goals, renewable energy can counterbalance volatile fossil fuel imports.

Most countries can harness renewable resources, whether it be solar, wind, geothermal or hydropower. New solar and storage, for example, can be faster to deploy, more resilient – as it is (not dependent on fuel for power generation –) and cheaper than new fossil fuel plants. 

In response to the energy crisis: 

• 54 countries have introduced measures to conserve energy and shield consumers, according to the IEA.
• 25 countries, plus the EU, have announced a wide range of clean energy and electrification policies, investments and initiatives, according to the Global Energy Crisis Policy Monitor. These span all regions of the world, including North and South America, Europe and Asia.¹ZCA analysis of IEA and Global Energy Crisis Policy Monitors, both checked as of 3rd June 2026.   

Out of all regions, Asia has enacted the most clean energy measures since the war. 14 Asian countries have made announcements. Across Asia:

• On 30 March, the Philippine government reported the activation of 250 MW of solar capacity and 450 megawatt-hour (MWh) of battery storage. 
• On 11 April, the Thai government approved a THB 5 billion loan scheme to support the public’s energy transition efforts, such as rooftop solar installations and EV purchases. 
• On 13 April, Indonesia’s state-owned electricity company, PLN, shared plans to replace more than 2,000 diesel-powered plants (with a total capacity of 1.07 GW) with new renewable energy-based power plants, citing the need to reduce reliance on expensive imported fuels. Earlier in March, President Prabowo also announced the country would build 100 GW of solar as quickly as possible. 

Table 1

Region in focus: Impacts on Asia

Asia stands out globally as the region most vulnerable to constrained supply and rising energy prices caused by the war – but also as the region that has been most aggressive in rolling out clean energy measures. 

Fossil fuel costs have risen in Asia, pushing up fossil fuel prices

Asian oil and gas prices have surged since February 2026. Rising prices push up fossil fuel import bills for Asian countries, many of which depend heavily on imported coal and gas for power generation. As a result, power prices have already increased. 

Figure 4

The largest percentage increases in average gasoline and diesel prices in Asia were concentrated in South and Southeast Asia:²ZCA analysis; Asia includes South, Southeast and East Asia in this grouping.  

• Gasoline: Myanmar, Philippines, Malaysia, Pakistan and Cambodia
• Diesel: Laos, Indonesia, Myanmar, Malaysia and Nepal

Asia has felt widespread economic impacts 

Increased coal, oil, and gas prices have had macroeconomic and microeconomic impacts in Asian countries, including:

• Inflation: the war has pushed up inflation in most countries in Southeast Asia, with the impact most apparent in the Philippines, Vietnam and Thailand, according to the Financial Times.
• National budget deficits:
  • Indonesia’s budget deficit already stood at IDR 695 trillion (USD 40.1 billion) or 2.9% of GDP in 2025. This deficit is expected to increase as crude oil prices hit triple-digit levels and Indonesia increases its energy subsidies.
• Higher fossil fuel subsidies:
  • If oil remains at USD 100/bbl for four months, Asia’s total subsidy bill will exceed USD 80 billion, according to Wood McKenzie.³Brent oil prices stood at USD 72.5/bbl on Feb 27, a day before the war started. India would be hit hardest among Asia’s major economies in this scenario: paying out a cost equivalent to 0.7% of its GDP and 7.2% of government revenue in fiscal year 2025-26.
  • The recent rise in energy prices pushed Malaysia’s monthly petrol/diesel subsidies to approximately RM 5 billion (USD 1.3 billion), more than seven times the amount spent before the rise in global oil prices ahead of the war. This amount would be more than enough to cover basic infrastructure projects for rural communities, such as roads and bridges, electricity supply, and water supply.
  • Thailand’s Oil Fuel Fund, from which subsidies are paid, fell into a THB 62.4 billion (USD 1.9 billion) deficit on April 26, including a shortfall from both the oil and liquefied petroleum gas (LPG) accounts.

Higher fuel prices are having knock-on effects on consumers in Asia 

Figure 6

• Consumer price index (CPI): The Philippines experienced the highest inflation increase, with the consumer price index (CPI) 7.2% higher in April 2026 than in April 2025, followed by Vietnam, Thailand, Indonesia, Malaysia and Singapore. 
• Power prices
  • Thailand increased power prices by 1.8% for the May-August 2026 billing period.
  • Pakistan saw power prices increase by 4.25% in April.⁴ZCA analysis. We calculated the percent increase from the national average power tariff for Pakistan at Rs. 33.38/kWh for 2026, by an increase of Rs 1.42/kWh in April. 
  • In the Philippines, the Manila Electric Company (Meralco), the largest utility in the country, increased power generation charges by 4.86% in May due to higher fuel costs.
• Fertiliser, food, transport prices and plastics supply chains
  • High fertiliser prices and strained supply of key inputs like urea have raised costs for farmers in Asia at the start of key planting seasons, which will reduce crop yields. Major agriculture producers like India and Thailand depend on the Gulf for 40% and 70% of their urea imports, respectively, according to the World Trade Organisation. 
  • Shortages of naphtha and other feedstock are leading to shortages of plastics, closing some plants and raising prices of consumer goods. 
  • In the Philippines, consumer impacts have been especially apparent and the country has declared a state of national energy emergency. Food prices (such as rice, fish, meat) have increased in the Philippines due to higher oil and fertiliser prices. Jeepney drivers, motorcycle, and car ride-hailing drivers are protesting as diesel/petrol prices soar, cutting incomes.

Asian countries have increased investment in clean tech

Figure 7

According to the IEA, demand for clean technologies in Asia has increased significantly between the first quarter of 2025 and the first quarter of 2026:

• In particular, the Philippines was the largest importer of Chinese solar panels among emerging markets and developing economies in the first quarter of 2026, at triple the rate of their 2025 imports. 
• Induction cookstove sales in India also jumped 10 to 15 times over the same period. 

Data compiled by research group Ember shows a jump in cleantech imports across many Asian markets since the conflict began:

• China’s exports of EVs into the rest of Asia rose to a new record high of USD 2.2 billion in April amid the surge in fuel prices.
• Chinese EV exports to Japan more than doubled from a year before to reach USD 171 million in April, while roughly tripling in both Myanmar and Laos.
• Malaysia saw record Chinese battery imports in April. 
• Nepal’s imports of Chinese solar PV products surged more than 12-fold to USD 9.1 million in April, and Bhutan also set fresh monthly import records. 

Figure 8

• 1
  ZCA analysis of IEA and Global Energy Crisis Policy Monitors, both checked as of 3rd June 2026.    ↩︎
• 2
  ZCA analysis; Asia includes South, Southeast and East Asia in this grouping.   ↩︎
• 3
  Brent oil prices stood at USD 72.5/bbl on Feb 27, a day before the war started. ↩︎
• 4
  ZCA analysis. We calculated the percent increase from the national average power tariff for Pakistan at Rs. 33.38/kWh for 2026, by an increase of Rs 1.42/kWh in April.  ↩︎