The war between the US, Israel, and Iran has interrupted much of the oil and gas trade coming from the region, forcing countries far away to deal with the sudden disappearance of their energy supplies. Combining various sources, the New York Times offers us a detailed snapshot of the hardships faced by countries accustomed to relying on the Gulf to meet their energy needs.
The Persian Gulf supplies about one-fifth of the world’s energy demand. Since Iran has effectively blocked shipments, international oil and gas prices have skyrocketed. As a result, gasoline, jet fuel, and other derivatives have become more expensive, impacting drivers, entrepreneurs, and families from Los Angeles to Lahore, Pakistan.
The countries most affected by the Persian Gulf crisis
While the world struggles with this energy crisis, some nations are suffering particularly hard. In 2024, nearly 21 million barrels of oil passed daily through the Strait of Hormuz, the narrow passage connecting the Persian Gulf to the rest of the planet. Almost four-fifths of that flow was destined for Asia.
China has long been the main buyer of hydrocarbons from the Gulf. With more than one-third of its total imports coming from that area, the blockade represents a heavy blow for Beijing: Beijing imports exactly 414 million barrels of oil annually from the region, that is 35% of its total imports.
But other states depend almost entirely on the region for their needs. Pakistan imports as much as 81% of its energy from the Persian Gulf, followed by Japan (57%), Thailand (56%), South Korea (55%), India (50%), Taiwan (40%), Malaysia (29%), Singapore (29%), the Philippines (26%), Indonesia (15%), Turkey (7%).
Pakistan is considering introducing a four-day workweek and remote learning or work to save on reserves. In Thailand, a public fund created to cap fuel costs during price spikes went into deficit just this month. In India, where the economy relies on the Middle East for about 40% of oil imports and 80% of gas imports, the shortage of cooking gas is putting families in difficulty. Across Asia, thousands of flights have been canceled because airlines, short of kerosene, can no longer refuel.
Europe is historically less dependent on the Gulf than Asia. In the past, it mainly sourced natural gas from Russia, but in recent years it has shifted focus towards the United States and Norway. Yet the continent has had to face one energy crisis after another: first the one triggered by the war in Ukraine and Western sanctions, now this new emergency.
According to New York Times data, the country most dependent on Persian Gulf energy is Greece (36%), followed by Poland (30%), Italy (22%), France (18%), the United Kingdom (11%), the Netherlands (10%), Spain (9%).
Russia remains the third largest oil producer worldwide and the second largest gas producer; however, sales of its energy products are heavily restricted while the invasion of Ukraine continues.
In response to the price surge following joint attacks with Israel against Iran, the United States temporarily suspended sanctions on Russian oil already in transit, hoping to ease global market pressure. The European Union has not adopted similar measures.
In Africa
African countries, like much of the Global South, experience the situation unevenly. The Seychelles, an island in the Indian Ocean, imported almost all of its energy needs from the Gulf in 2024. The same was true for Mauritius, while Nigeria, a major oil producer and OPEC+ member, has historically imported few fossil resources from the Middle East.
But the effects of the war are being felt in Egypt, which imports 45% of its energy from the Gulf, and in South Africa (33%).
The fertilizer problem
The Persian Gulf is also a dominant source of fertilizers, thanks to abundant energy that has favored the establishment of plants producing raw materials for agriculture.
A prolonged increase in fertilizer costs could force governments in South Asia and sub-Saharan Africa to subsidize crop prices or helplessly watch food prices rise. In both cases, the public debt burden of many low-income countries could worsen further.
Meanwhile in the US
The United States is the world’s largest producer of oil and gas, so the impact of the Middle Eastern supply blockade is much less severe for them.
However, America and other countries not heavily dependent on the Gulf are also feeling economic repercussions. The jump in oil prices – over $100 per barrel in recent weeks – has already influenced other important macroeconomic indicators.
The cost of gasoline has risen by about one dollar per gallon nationwide since the conflict broke out. US airlines have begun reducing flights due to higher fuel costs. Inflation concerns have pushed mortgage rates to their highest levels in the last three months, just weeks after they had fallen below 6% for the first time since 2022.
If the war prolongs or prices continue to rise, the damage will likely worsen, economists warn. Perhaps this is also why the White House has strongly insisted it does not need Middle Eastern oil – and is increasingly resorting to military force to try to break the blockade imposed by Iran.
