The Strait of Hormuz no longer points west. Last year, over 80 per cent of the oil and 90 per cent of the liquefied natural gas coming out of the Gulf went to Asia - making the continent the primary victim of the Iran war's energy fallout.
According to "Hvylya", referencing a Financial Times analysis by Daniel Yergin, the main markets for Gulf supplies used to be Europe and the United States. But in economic terms, the strait "now points east, meaning the immediate crisis is focused on Asia."
Asian buyers deprived of Qatari LNG cargoes are now bidding up prices on the Asian spot market to pull mainly US cargoes away from Europe. Asian spot LNG prices have almost doubled since the war began. The European natural gas price is up about 50 per cent as a knock-on effect, putting fresh pressure on Europe's economy.
Yet Yergin stressed this is far from an Asia-only problem. Europe and Africa depend on the Gulf for a substantial part of their jet fuel. The longer the conflict continues, the more upward pressure will be applied on prices across the board. Shortfalls in Asia, he noted, "will soon show up at gasoline pumps in North America."
The disruption underlines a fundamental shift in global energy geography - one where Asia's massive demand has made it the most exposed region to any chokepoint crisis in the Gulf.
Also read: US Grants India Temporary Waiver for Increased Russian Oil Purchases Amid Gulf Crisis