SINGAPORE: Oil price shocks triggered by the escalating conflict in the Middle East are beginning to ripple through Southeast Asia, raising concerns over inflation and energy costs across the region.
According to
The Business Times, the surge in global oil prices is already being reflected in higher transportation, electricity and food costs in several Southeast Asian countries.
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The spike in energy prices follows disruptions to global oil supplies linked to the conflict involving Iran and Western allies, which has affected shipping routes in the Strait of Hormuz, a key chokepoint for global energy trade.
About 20 per cent of the world’s oil supply normally passes through the strait, meaning any disruption could have major consequences for energy-importing economies, particularly in Asia.
Analysts say Southeast Asia is vulnerable because many countries rely heavily on imported fuel, making them exposed to sudden spikes in global oil prices.
According to analysts cited, governments in the region may face higher fuel subsidy bills and rising fiscal pressure if energy prices remain elevated.
Higher fuel costs are also expected to push up business operating expenses and transportation costs, potentially feeding into broader inflation in the region.
Economists warn that prolonged disruption to Middle Eastern oil supplies could slow economic growth in Southeast Asia and highlight the region’s continued dependence on imported fossil fuels.
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