Asean could be hard hit by intensifying Iran crisis as G7 broods

WHEN the Iran war began on Feb 28, many market participants expected the conflict to last only days. However, the crisis is now approaching the three month mark of its onset, with growing warnings about the intensifying energy and wider economic fallout, especially for Asia.

With the Strait of Hormuz still largely closed, a new phase of the economic challenge may soon begin. JPMorgan asserts that as soon as early June, global oil stocks could hit operational stress levels with inventories of around 7.6 billion barrels, whereby supply chains face extreme strain and wider refined product rationing begins.

This would be a key pivot point, as price volatility would probably rise significantly. Moreover, the margins for error would fall dramatically in terms of supply chain management.