If the agreement to reopen the Strait of Hormuz is reached, hundreds of oil tankers carrying crude oil, gas and fuel can begin a journey lasting about a month to return to ports in Asia.
Industry experts and economists warn that, due to trade disruptions for too long, the global market needs quite a lot of time to return to normal. This means that inflationary pressure and supply chain issues may continue to prolong until the end of 2026.
Mr. Joshua Ngu - Vice President in charge of Asia-Pacific region of energy consulting firm Wood Mackenzie - said that for Asia, the good news is that when the Strait of Hormuz is reopened, oil and part of gas supplies will return.
However, the bad news is that in the past 3 months, every day the Hormuz Strait closes, economic disruptions increase exponentially and spread deeper into the entire supply chain. These problems will not be solved in a short time.
Economists fear the pressure will last longer than the current geopolitical crisis. The time for ships to pass through the strait, reach the destination and return alone has taken months. This process could be even slower if concerns arise about the possibility of escalating tensions or insurance companies refuse to insure ships operating in the area.
Inflationary pressure related to disruptions to oil, gas and oil products supply may also be prolonged. For example, LNG prices in Asia are often linked to oil prices with a delay of 3-6 months. This means that if oil prices fall in June, LNG prices may still be high until the end of the year.
Blockages in the supply chain are also forecast to continue to prolong. One of the sectors most heavily damaged by the Iranian conflict is the global fertilizer supply. Five major fertilizer exporting countries including Iran, Saudi Arabia, Qatar, the United Arab Emirates (UAE) and Bahrain currently supply more than 1/3 of the global urea supply. The disruption affects the peak planting season in Southeast Asia, which takes place from May to July.
Mr. Albert Park - chief economist of the Asian Development Bank (ADB) - said that disruptions for about 1 month can still be controlled, but if prolonged deep into the sowing season, crop yields will decrease, creating serious food security problems.
In other areas, businesses in Japan and South Korea are facing a shortage of naphtha - a petrochemical product obtained during crude oil refining, used to produce plastic films and food packaging.
The limited supply of other commodities such as helium and liquefied petroleum gas (LPG) is also putting pressure on many sectors, from cooking to diagnostic imaging in medicine.
Mr. Haruhiko Sakaino - advisor to the Japan Agency for Natural Resources and Energy - said that for naphtha alone, restoring the supply chain to normal status may take at least 1 year from the time goods from the Middle East are reconnected. Things will not be as simple as just restoring imports, he noted. "This is like damaged capillaries, it takes a lot of time to recover," he said.
