Iran War Shakes Global Oil Market: What India, Pakistan, Bangladesh and China Are Doing

Crude oil prices climbed beyond USD 110 a barrel on Monday, hitting levels last seen in 2022, as tensions involving the US, Israel and Iran disrupted global supplies. Governments from Asia to the Middle East reacted with emergency steps, targeting petrol, diesel, jet fuel and household energy use to contain rising costs.

The near shutdown of the Strait of Hormuz, which handles around 20% of world oil trade, pushed exporters such as Saudi Arabia, the UAE, Kuwait and Iraq to cut production. That squeeze deepened the global energy crunch, driving up transport expenses, pressuring businesses and straining household budgets across many importing nations.

Crude oil prices and South Korea’s cap on domestic fuel costs

South Korea, which relies heavily on foreign oil, flagged risks from attacks on Iran’s energy sites and possible Strait of Hormuz closure. President Lee Jae Myung said domestic fuel prices will be capped, the first such move in nearly three decades. Authorities are also studying alternative supply routes that avoid the Strait of Hormuz.

Pakistan responded to the surge in crude oil prices and disrupted Middle Eastern gas supplies with wide austerity steps. Prime Minister Shehbaz Sharif announced a four-day workweek, a 50% reduction in government working hours and a 20% cut in state spending over the next two months. Fuel use for official vehicles has been halved.

Crude oil prices and India’s push on domestic LPG output

India’s Ministry of Petroleum and Natural Gas directed domestic refineries to raise liquefied petroleum gas production for households. A statement on Monday said plants must prioritise cooking gas supply for homes as global trade flows stay uncertain. An executive directors’ committee from major oil marketing companies will track and manage LPG distribution to hotels, restaurants and other commercial users.

China moved early in the year to shield itself from volatile crude oil prices by expanding reserves. Officials increased crude purchases during the first two months, placing extra barrels into commercial and strategic tanks. Refiners were ordered to stop signing new fuel export contracts and to seek cancellation of existing deals to safeguard domestic availability.

Crude oil prices and Japan’s readiness to tap national reserves

Japan prepared for potential shortages linked to higher crude oil prices by readying a possible crude release from national reserves. Officials from the Japan Organisation for Metals and Energy Security at the Shibushi storage site confirmed that the Agency for Natural Resources and Energy issued a preparation order on Friday, signalling concern over tightening global supply.

Vietnam, among the countries feeling strong pressure from fuel disruptions, urged employers to support work-from-home arrangements. The Ministry of Trade advised companies to cut commuting and business travel to reduce fuel demand as prices rise during the Iran war. The ministry stressed that energy saving has become essential while global fuel availability remains under strain.

Crude oil prices, emergency steps in Egypt and rationing in Bangladesh

Egypt adjusted fuel tariffs in response to higher crude oil prices, lifting diesel from 17.50 to 20.50 Egyptian pounds. The petroleum ministry linked the move to an “exceptional situation” caused by Middle East tensions. Bangladesh, meanwhile, faced panic buying and hoarding, prompting inspections of fuel stocks, rationing measures, earlier Eid al-Fitr holidays and temporary university closures to manage energy demand.

The recent shifts in fuel prices and policy responses across key countries can be summarised as follows:

The conflict involving the US and Iran has turned into a wider energy shock, as crude oil prices stay high and countries across Asia, Africa and the Middle East scramble to secure supplies. Governments are capping prices, rationing fuel, lifting domestic production and readying reserves, while experts caution that the coming weeks will be vital for stabilising costs and availability.