# Asia Markets Plunge Amid Escalating Middle East Tensions

- Link: https://www.thailand-business-news.com/markets/commodities/296160-asia-markets-plunge-amid-escalating-middle-east-tensions
- Published: 2026-03-23T12:52:50+07:00
- Author: Daniel Lorenzzo

Asian equities plunged on Monday as mounting tensions between the United States 
and Iran rattled global energy markets. The **Nikkei 225** in Tokyo fell 3.6%, South
Korea’s **Kospi** dropped nearly 6%, while Hong Kong’s **Hang Seng** and Shanghai’s**
Composite Index** lost 3.5% and 2.5% respectively. Investors fled risk assets amid
fears of prolonged disruption to oil and gas supplies.

At the heart of the crisis is the **Strait of Hormuz**, a narrow waterway through
which nearly 20% of global crude and liquefied natural gas (LNG) shipments pass.
Since late February, the strait has been effectively blocked following US–Israeli
strikes on Iran. Washington has threatened further military action unless Tehran
reopens the passage, while Iran has vowed retaliation against regional energy and
desalination infrastructure.

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The **International Energy Agency (IEA)** warns the standoff could trigger the worst
energy crisis in decades, drawing comparisons to the 1970s oil shocks and Russia’s
2022 invasion of Ukraine. Oil prices remain above $110 per barrel, compounding inflationary
pressures across Asia.

Regional economies are particularly vulnerable:

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 * **Japan** relies on the Middle East for 95% of crude imports, with 70% transiting
   Hormuz.
 * **South Korea** sources about 70% of its crude from the region.
 * **India** depends on the Gulf for 58% of imports, though Russian supplies provide
   partial relief.
 * **China** imports roughly half its crude from the Middle East, with Iran alone
   supplying 11%.

LNG disruptions are also hitting South Asia hard. Pakistan and Bangladesh face acute
shortages, with reserves covering only two to three weeks of consumption.

The escalating conflict underscores Asia’s heavy reliance on Gulf energy and highlights
the fragility of global supply chains. Analysts warn that prolonged instability 
could force governments to consider rationing, accelerate diversification of energy
sources, and intensify inflationary pressures across the region.