Post by Cordoba Research Group

The US-Iran war has moved from a geopolitical risk to a live economic shock. Asia appears to be bearing the brunt. 🌏 Asia imports approximately 85% of its oil from the Middle East. With the Strait of Hormuz under pressure, regional oil imports fell 30% year-on-year in April alone. US and Russian supply increases have not been enough to close the gap. The knock-on effects are widening. The Asian Development Bank has revised Asia-Pacific growth down to 4.7% for 2026 and raised its inflation outlook to 5.2%. Urea prices - the world's most common fertiliser, jumped more than 40% within weeks of the conflict starting. The UN World Food Programme estimates that 45 million additional people could be pushed into acute hunger this year as a result. Governments are responding, but the tools available are limited. Wealthier economies are drawing on strategic reserves. Poorer nations across Southeast Asia are already implementing austerity and rationing. Subsidies, reserve releases and short-term relief measures are unsustainable if the disruption persists. Policy buffers are being spent down, not replenished. As the IMF's Andrea Pescatori noted, Asia entered 2026 on a strong footing. The war in the Middle East is now raising inflation, weakening external balances and narrowing the options available to policymakers. Our commodities team is monitoring the evolving impact across the region. A full research note will follow. Read our initial note here: https://lnkd.in/eTEJ8M-N #CordobaResearchGroup #Asia #MiddleEast #Energy #EmergingMarkets #Commodities #Geopolitics #MacroResearch