Newsletter N°87 - March 2026 

It has been a month since fresh hostilities began in the Middle East, and the economic impacts of the de facto blockade of the Strait of Hormuz, effectively controlled by Iran, are only now starting to surface across the region.In the very short term, prices of gas oil, fuel oil, and gasoline are rising rapidly in South Korea and Japan, while stock market indices are falling.

 

China is not immune either, even though some of its cargo ships are apparently (barely) making it through as of the end of March. About 40% of China’s crude oil imports pass through the strait, so a global downturn would be catastrophic for a country still heavily dependent on exports.

 

South Korea could be severely affected, as 70% of its crude oil imports transit through the strait. The Iranian ambassador recently stated that Tehran considers the country non-hostile, technically allowing the safe passage of Korean ships.

 

However, this safe passage excludes vessels associated with the United States, an issue, given that most domestic refiners maintain close ties with American companies. Countries in the region have strategic stockpiles, and both Japan and South Korea have already announced the release of significant reserves in the short term.

 

Beyond energy, many other industries that rely on refined oil products are sounding the alarm and showing increasing signs of concern.

 

The shortage of oil affects plastics and solvents, and therefore many everyday items such as bags, food containers, and even hangers. Transportation providers are also reporting impacts on logistics, which may in turn affect various other sectors.

 

The 2011 Fukushima crisis in Japan highlighted society’s dependence on electricity. Today, the far-reaching consequences of dependence on oil are becoming even more apparent.