US-Iran conflict: Strait of Hormuz closure to hurt India, Pakistan and Bangladesh — list of countries to be impacted

The US-Iran conflict has now entered its fourth day, and the world is watching closely, not only because of the deeper military confrontation the entire Middle East has plunged into, but also because of the shockwaves it has sent to the global energy markets.

While Iran’s decision to close the Strait of Hormuz is expected to disrupt global energy markets, Asian countries are likely to bear the brunt of the impact, CNBC reported.

The development came on Monday, days after the United States and Israel launched strikes on Iran, targeting the Islamic Republic's military and naval forces and killing some of the country's top officials, including the Supreme Leader Ayatollah Ali Khamenei. A senior official of the Islamic Revolutionary Guard Corps (IRGC) announced the closure of the Strait of Hormuz, warning that any vessel that will attempt to transit the arterial waterway would be targeted.

The Strait of Hormuz is located between Iran and Oman and acts as a crucial artery for global oil trade. Nearly 13 million barrels per day passed through the waterway in 2025, accounting for 31% of all seaborne crude flows, CNBC reported, citing data from Kpler.

An extended closure of the Strait is likely to result in a surge of oil prices, with some analysts expecting oil to cross $100 per barrel. Since the conflict broke out, Brent, which is the global benchmark, has been up nearly 10% and was last up at 2.6% at $80 per barrel.

Nearly 20% of global liquefied natural gas exports from the Gulf are at risk, particularly shipments from Qatar that transit through the Strait of Hormuz, according to Kpler. Qatar, one of the world’s largest LNG exporters, suspended production on Monday after Iranian drones struck facilities at Ras Laffan Industrial City and Mesaieed Industrial City.

Nomura, in a note on Monday, said, "In Asia, Thailand, India, Korea, and the Philippines are the most vulnerable to higher oil prices, due to their high import dependence, while Malaysia would be a relative beneficiary since it is an energy exporter."

Pakistan and Bangladesh are extremely vulnerable owing to the limited storage and procurement flexibility. Bangladesh is already running a crucial structural gas deficit, and according to the Institute for Energy Economics and Financial Analysis, Dhaka is running a deficit of over 1,300 million cubic feet per day. However, India faces the largest combined exposure in the region, since over half of its LNG imports are linked to the Gulf region and a significant portion is Brent-indexed, an analyst said, adding that a Hormuz-driven crude spike would lift oil import costs and LNG contract prices, which will create a dual physical and financial shock.

Similarly, nearly 60% of India's oil imports are from the Middle East, and a sustained blockade would therefore increase both energy import costs and current-account pressures.

China: While the closure of Hormuz could test China's energy security, the CNBC report suggests that the country's stockpile and alternate supplies offer some buffer. China, the world's largest crude-oil importer, purchases over 80% of Iranian oil, whereas nearly 30% of its LNG imports come from Qatar and the UAE. China's nearly 40% of oil imports transit through the Strait of Hormuz, according to UBP estimates.

Japan and South Korea: The Gulf region supplies nearly 75% of Japan's oil imports and at least 70% of South Korea's. In terms of LNG imports, Japan and South Korea's exposure is less compared to South Asia's. South Korea sources 14% of its LNG imports from Qatar and the UAE, while Japan sources only 6%. According to Kpler's report, inventories for both countries are limited. While Korea holds nearly 3.5 million tonnes of LNG, Japan has around 4.4 million tonnes in reserves, which is just enough for two to four weeks of stable demand.

Southeast Asia: The report suggests that across most of Southeast Asia, the immediate impact would likely be higher costs rather than outright shortages. Spot-reliant LNG buyers could face sharply rising replacement costs as Asian importers compete with Europe for Atlantic cargoes, an analyst said.

Thailand stands out in Nomura’s assessment as particularly vulnerable to higher oil prices, given the scale and immediacy of the external shock. The country has Asia’s largest net oil imports at 4.7% of the Gross Domestic Product (GDP), and every 10% increase in oil prices could widen its current account deficit by roughly 0.5 percentage points of GDP.