Asia could take biggest hit from oil disruption: Goldman Sachs
What's the story
Global crude oil markets are facing a fresh wave of tightening, with rising prices threatening to impact economies worldwide. Supply disruptions and distribution bottlenecks have pushed energy costs higher in recent months. The situation has been further exacerbated by fears that the Iran war could last longer than expected, potentially disrupting global energy supplies even more.
Market analysis
Asia most vulnerable to prolonged Persian Gulf supply disruption
Global brokerage firm Goldman Sachs has flagged Asia as the most vulnerable region to a prolonged Persian Gulf supply disruption. The firm stressed that while there is no immediate risk of the world running out of oil, certain countries and fuel products could face sharp shortages depending on how long the Strait of Hormuz remains effectively shut.
Fuel impact
India may face inflationary pressures, higher import costs
Goldman Sachs has noted that Asia is already showing signs of stress in key fuel categories, especially petrochemical feedstocks like naphtha and LPG. For India, a prolonged disruption could mean tighter fuel availability, higher import costs, pressure on industrial supply chains, and possible inflationary spillover for the wider economy.
Supply dependency
Strategic reserves may help China, Japan absorb shocks
Goldman Sachs's report highlights that Asian countries in its sample, accounting for about a third of global refined product demand, sourced nearly half of their refined product supplies from the Persian Gulf. Countries with larger strategic reserves like China and Japan may be better positioned to absorb the hit. However, South Korea and Singapore are especially dependent on these imports.
Import decline
Asia's net oil imports have fallen sharply
Goldman Sachs has warned that the cushion of offsetting missing Persian Gulf barrels by drawing supplies from elsewhere, processing stored crude, and curbing exports is now weakening. The firm's report shows that Asia's net oil imports have fallen sharply by the end of March, indicating an intensifying impact from lower crude flows just as earlier cargoes loaded before disruption were fading out of the system.
Supply risks
India entering a more fragile supply environment
Goldman Sachs's report suggests that while India is not facing an outright nationwide fuel collapse, it is entering a more fragile supply environment. Product-specific shortages, higher import costs, and pressure on industrial fuel availability could become more visible if the Strait of Hormuz remains disrupted for longer. The country's large refining system and policy flexibility may help soften the blow but its reliance on Persian Gulf-linked flows still leaves it exposed to prolonged instability.