By Gabriele Steinhauser in Singapore and Chelsey Dulaney in London
The oil shock set off by the war in Iran is already rippling through Asia, where factories are curbing production to save energy and some gas stations are telling drivers they can fill up only partway. Economists say it is a sign of things to come for countries in Europe and Africa that also rely on imports from the Middle East.
Iran's blockade of the Strait of Hormuz has left the global oil supply 10% below what was needed before the war, according to Oxford Economics. The strait is also a critical thoroughfare for liquefied natural gas, which many countries rely on to produce electricity and fertilizer.
Asia and the broader Pacific region have been the first to see serious constraints on supply. The continent is also geographically closer to the Gulf, which means that most ships that were en route when the war started have already arrived. Making matters worse, many Asian countries have low domestic energy stockpiles, though some nations like Japan, China and South Korea hold large buffers.
President Trump said Wednesday that U.S. operations in Iran could wind down in about three weeks. However, an end to the fighting doesn't mean that Iran will immediately reopen the strait. Shipping delays will further hold back supplies, as will damage to key energy facilities in the Gulf.
That leaves Europe and many African countries dangerously exposed. The U.S., a net energy exporter, is less likely to see shortages, even as higher gas prices hurt consumers.
"The reality is, the economic shocks caused by this war will be with us for months," Australian Prime Minister Anthony Albanese said last week.
Australia has begun issuing weekly updates on national fuel stocks. As of March 31, the country had 39 days of gasoline, 29 days of diesel and 30 days of jet fuel.
Albanese urged Australians to take public transport to preserve supplies for industries such as mining and farming. Some gas stations have at times limited how much customers can buy. In recent days, hundreds have reported being out of at least one type of fuel, which officials have chalked up to panic buying.
The Indian government has cut liquefied petroleum gas for factories -- including those making steel, cars, textiles and plastics -- to 70% of prewar levels. Authorities in Bangladesh have closed most plants making urea fertilizer from natural gas, which could affect food security down the line.
Indonesia, the world's leading nickel producer, this week imposed a cap of 50 liters, or just over 13 gallons, of fuel for motorists a day.
Most governments are trying to cushion the price shock for consumers and businesses by cutting fuel or road taxes or introducing cash handouts. While oil prices have risen by 53% in Asia over the past month, domestic fuel prices have increased only 16%, analysts at Morgan Stanley said.
Keeping prices down during a supply crisis also props up demand, making shortages worse. Poorer countries, however, lack the funds to sustain such measures.
Pakistan's government has raised gasoline prices by 46% and diesel prices by nearly 90% from before the war. Pakistan must work "to avoid a default-like situation," said Ali Pervaiz Malik, the federal petroleum minister.
Europe could be next. Gasoline prices are up 15% and diesel has increased 30% across the European Union. Natural-gas prices have jumped by more than 50%.
Most energy shipments that set off from the Gulf before the war have now landed in Europe. Several tankers have diverted fuel shipments to Asia, where prices are now higher.
Europe came into the crisis with large buffers: It has about 450 million barrels of oil and refined products in reserve, according to Société Générale. But as countries run down reserves, European leaders are shifting to bringing down demand.
"It is clear that the more you can do to save oil, especially diesel, especially jet fuel, the better we are off," Dan Jørgensen, the EU's energy commissioner, said. "We are in a situation that might worsen, where indeed, demand reduction is necessary."
Slovenia imposed limits on fuel purchases after a wave of panic buying and "fuel tourism" from neighboring countries ran some gas stations dry.
"Most stations were out," said Kristina Topalovic, a tour guide in the Slovenian capital, Ljubljana. "In some places, there was no diesel, only petrol." Many Slovenians have turned to a website showing which stations have fuel, though she noted the situation has improved.
Fuel stations in Slovakia and Hungary are now charging cross-border drivers higher prices.
European countries import relatively little LNG and crude from the Gulf, but they depend on the region for oil-based products such as jet fuel. Ryanair Chief Executive Michael O'Leary warned that the airline industry could face jet-fuel shortfalls by May.
By that time, JPMorgan analysts have said, there could also be disruptions on the U.S. West Coast, especially in California, where gas prices have surged to nearly $6 a gallon. The West Coast relies on imports and is now competing with the rest of the world for dwindling supplies.
Write to Gabriele Steinhauser at Gabriele.Steinhauser@wsj.com and Chelsey Dulaney at chelsey.dulaney@wsj.com
(END) Dow Jones Newswires
April 05, 2026 23:00 ET (03:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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