The Iran war has split global financial markets along a sharp geographic line, "Hvylya" reports, citing The Economist's analysis. The S&P 500 is down just 1.5% in March. European stocks have fallen 5-6%. Japanese equities are off 7.3%, and South Korean shares have plunged over 10%.
The gap is not a mystery - it reflects fundamentally different energy positions. The United States has been a net energy exporter since 2019, thanks to its fracking revolution. Parts of the American economy actively benefit from higher oil prices. Since the 1970s, the ratio of US oil consumption to real GDP has dropped by more than 70%, as vehicles became more efficient and cheap natural gas displaced oil in heating and power generation.
Asia faces the opposite reality. The Gulf supplies between 40% and 80% of seaborne crude purchased by China, India, Japan and South Korea, along with a large share of their gas imports. In 2025, Asia absorbed roughly 87% of the crude and 86% of the LNG passing through the Strait of Hormuz. When that chokepoint closed, the continent's energy lifeline was severed.
American consumers are still feeling pain at the pump - average gasoline prices have climbed nearly 20% since the war began. A rule of thumb holds that every $10 rise in oil adds about 25 cents per gallon. But the broader US economy is cushioned in ways Asia simply is not. The Federal Reserve's room to maneuver is limited by above-target inflation even before the war, with traders now pricing in fewer rate cuts than before the conflict.
Imports account for 87% of Japan's energy consumption and 84% of South Korea's. Japan sources approximately 95% of its oil from the Middle East, with about 70% routed through Hormuz. A lasting price rise would sharply inflate import bills across the region, compounding the market damage already visible in plunging stock indices and weakening currencies.
Also read: Oil Prices Surge Past $100: Petraeus Maps the Ripple Effects of a Blocked Strait of Hormuz.