IMF flags energy risk for Asia
The IMF warned that Asia is especially vulnerable to a war‑induced energy shock because many economies rely heavily on Middle Eastern fuel supplies. The fund said a prolonged conflict that disrupts energy flows could sharply affect regional growth through commodity price spikes and weaker market sentiment. (reuters.com)
Asia faces a sharper hit from the Middle East war than most regions because it imports so much of its oil and gas from the Gulf. (imf.org) The International Monetary Fund said on April 16 that Asia’s net oil and gas imports equal about 2.5% of the region’s gross domestic product, and oil and gas use equals about 4% of output. IMF Asia director Krishna Srinivasan said that share is nearly double Europe’s. (imf.org) The IMF’s baseline forecast still has Asia growing 4.4% in 2026 after 5.0% in 2025, with inflation rising to 2.6% from 1.4% last year. In the fund’s adverse and severe scenarios, cumulative growth through 2027 would be 1% to 2% lower if the shock lasts or worsens. (imf.org) The vulnerability starts with geography and shipping lanes. The IMF said about 25% to 30% of global oil and 20% of liquefied natural gas move through the Strait of Hormuz, a route that feeds buyers across Asia and parts of Europe. (imf.org) Asia also burns a lot of fuel in factories, transport networks, and power systems. The IMF said oil and gas use exceeds 10% of gross domestic product in Malaysia and Thailand, while net oil and gas imports rise to about 8% of GDP in economies such as Singapore and Thailand. (imf.org) The risk is not only higher gasoline or electricity bills. Srinivasan said disruptions to fertilizers and petrochemical inputs such as helium and sulfur could add new supply-chain strains if the conflict persists. (imf.org) Energy markets have already moved. The International Energy Agency said global oil supply fell by 10.1 million barrels a day in March, North Sea Dated crude traded around $130 a barrel, and refineries in the Middle East and Asia cut runs by about 6 million barrels a day in April. (iea.org) The IMF said Asia entered 2026 in better shape than expected because exports, consumption, and a strong technology cycle held up through late 2025. China and India are still expected to generate about 70% of the region’s growth this year. (imf.org) That leaves governments balancing two pressures at once: pricier imports and weaker confidence. The IMF said the war is raising inflation, weakening external balances, tightening financial conditions, and narrowing policy space across the region. (imf.org) For now, the fund’s message is that Asia can absorb a short shock, but not cheaply. If oil and gas flows stay disrupted, the region that has been carrying global growth would do less of the lifting. (imf.org)
