Gulf conflict sends oil prices soaring, disrupting global supply chains
A prolonged conflict in the Gulf and Iran is pushing the global economy into another phase of severe disruption. Rising tensions have sent oil prices soaring, with Brent crude exceeding US$112 a barrel in March 2026. The fallout is now spreading beyond energy, hitting shipping, farming, and household budgets across Asia and beyond.
The International Energy Agency has called the current oil supply crisis the largest disruption in history. Shipping routes through the Strait of Hormuz face severe interruptions, driving up fuel costs. These pressures are particularly acute in Asia, where countries rely heavily on imported oil, gas, and food.
Fertilizer markets are the next major shock. Urea prices have surged by 30 to 40 percent since 2024, as natural gas shortages—linked to crude oil production—reduce supply. Major agricultural importers like India, Brazil, and Egypt now face higher costs and limited stockpiles. Farmers in vulnerable regions struggle with reduced purchasing power, raising fears of lower crop yields and food shortages. Asean nations, China, Japan, and South Korea are among the hardest hit. Even stable economies such as Malaysia are feeling the strain. Governments may soon face a difficult balancing act: maintaining subsidies, managing rising import bills, and coping with weaker regional demand.
The conflict's ripple effects are now touching multiple sectors, from aviation to household spending. With no quick resolution in sight, policymakers must prepare for lasting cost pressures on fuel, food, and fertilizers. Protecting the most vulnerable populations will be critical as inflation and supply shortages take hold.
