Approximately 80% of Asia's imported oil passes through the Strait of Hormuz — and since February 28, 2026, the world's most critical shipping lane has been effectively blockaded by Iran. This is not merely a regional energy crisis. This is the most severe global supply shock since the COVID-19 pandemic, and by many metrics, it is even more dangerous — because this time, goods face not just delays but the risk of physical destruction.
With oil reserves estimated at less than 20 days, Vietnam ranks among the most vulnerable Asian nations, alongside Pakistan and Indonesia, with the thinnest energy buffers. The war between the US and Israel against Iran is triggering an economic chain reaction that no country — not even the United States — can stand entirely outside of.
Strait of Hormuz: The Chokepoint of the Global Economy
To understand the severity of the situation, one must look at the numbers: before the war, approximately 20 to 21 million barrels of oil passed through the Strait of Hormuz daily, equivalent to roughly 20% of global crude oil supply. About 80% of Qatar's LNG (liquefied natural gas) exports — the world's largest LNG exporter — also travels through this route, with primary destinations being China, India, Japan, and South Korea.
When Iran announced the blockade of the strait in retaliation for US and Israeli attacks, a domino effect occurred almost immediately. Oil prices surged past $100 per barrel. Oil tankers anchored outside the strait, waiting in uncertainty. Refineries in the Middle East — many facilities already damaged by Israeli airstrikes on Iranian energy infrastructure and alleged Iranian attacks on installations in Qatar, the UAE, and Saudi Arabia — suspended operations.
Economist Heron Lim from ESSEC Business School assessed that this conflict threatens to trigger a new wave of cost-of-living pressures that governments and central banks will find extremely difficult to manage, especially when the pressure stems from the supply side — a type of inflation against which traditional monetary policy is least effective.
Asia: Wide-Scale Emergency Response
The response of Asian governments reveals genuine panic. These are not gentle precautionary measures — but wartime actions.
India invoked emergency powers to redirect liquefied petroleum gas (LPG) supplies from industrial users to households.
Thailand ordered state agencies to work from home to conserve fuel while imposing temporary price caps on diesel.
Bangladesh — dependent on imports for up to 95% of its energy needs — imposed fuel rationing, shut down universities, turned off decorative lighting in preparation for Eid al-Fitr, and deployed the military to guard oil reserves to prevent hoarding.
Nepal began rationing cooking gas distribution.
Philippines announced a four-day work week for some government agencies and urged citizens to set air conditioning at 24 degrees Celsius or higher.
South Korea imposed fuel rationing for the first time in nearly three decades.
Japan began releasing oil from national strategic reserves.
Pakistan dispatched warships to escort commercial vessels in the Middle East.
The overall picture is clear: Asia is in energy crisis management mode, and each nation is managing with its own resources — which are unequally distributed.
Vietnam: The Thinnest Buffer, the Highest Risk
With oil reserves estimated at less than 20 days, Vietnam ranks among Asia's most vulnerable nations facing this crisis. Hanoi is considering temporarily cutting import tariffs on fuel — a measure that reveals the government's level of concern.
More troubling is the economic structure. Vietnam is an export-oriented economy, with trade-to-GDP ratios among the world's highest (over 180% according to World Bank data). When energy prices rise, production costs increase, and export competitiveness declines — especially in energy-intensive sectors such as textiles, electronics assembly, and food processing.
But the impact does not stop at exports alone. Fertilizer — vital to Vietnam's agriculture — heavily depends on supplies from the Middle East. The Persian Gulf is the global center for fertilizer production, with natural gas as the critical input for urea — the world's most widely used nitrogen fertilizer. If fertilizer supply disruptions persist, food prices in Vietnam will surge dramatically, directly affecting tens of millions of farmers and consumers.
China: An Unexpected Beneficiary?
In Asia's grim outlook, China emerges as a notable exception. Beijing had stockpiled crude oil before the conflict, with approximately 1.4 billion barrels in strategic reserves. China also enjoys structural advantages: natural gas pipelines from Russia overland, partnership relations with Iran allowing continued imports, and Iran reportedly allowing Chinese vessels to pass through the Strait of Hormuz while blocking others.
Most notably, an Iranian official revealed to CNN that Tehran is considering allowing shipments transacted in Chinese yuan to pass through Hormuz. If this occurs, it is not merely a trade concession — but a strategic move targeting the US dollar's position in the global energy market. For decades, the "petrodollar" system — oil traded in US dollars — has been one of the pillars of American financial power. Any erosion of this pillar carries profound geopolitical significance.
However, Wayne Winegarden from the Pacific Research Institute noted that in the short term, the US maintains an advantage over China: the US is a major oil producer, and American oil companies could benefit from lost Middle Eastern supplies. China, despite having a better buffer than other Asian nations, still imports about 40% of its oil from the Middle East.
Global Supply Chains: Worse Than the Pandemic?
Economist Heron Lim presented a troubling assessment: this war is putting pressure on global supply chains even more severe than the pandemic, due to a fundamental difference in the nature of risk. During the pandemic, goods were delayed but ultimately arrived. In the Hormuz crisis, goods can be lost entirely — oil tankers attacked, goods destroyed, maritime insurance skyrockets.
Asian agricultural exports are also paralyzed. Thai rice shipments to the Middle East have come to a complete standstill — two vessels carrying around 80,000 tons of rice to Iraq were halted at Bangkok port. Indian agricultural exports to the Gulf region — bananas, rice, and other products — have declined sharply, forcing farmers to dump goods on domestic markets at low prices.
Asia accounts for approximately half of global industrial output. When this region is disrupted, the ripple effects spread worldwide — from electronics components to consumer goods, from textiles to processed foods. As Winegarden warned: the economic impact will not be confined to Asia but will spread globally.
Vietnamese-American Perspective: Remittances, Livelihoods, and Transpacific Concerns
For the Vietnamese-American community, this crisis creates pressure from two directions. In Vietnam, energy and food inflation directly affects families still living there — many whom Vietnamese Americans continue to support financially. In 2024, Vietnam received approximately 16 billion USD in remittances, with the majority coming from the United States. When prices rise in Vietnam, pressure to send more money will weigh heavily on Vietnamese-American families — while they themselves face rising gas and food prices in the US.
Nail salon owners — a significant portion of the Vietnamese-American small business community in California, Texas, and many other states — will clearly feel the impact as operating costs increase. Chemical prices, imported materials, and shipping costs all risk rising when Asian supply chains are disrupted. Similarly, Vietnamese restaurant owners in the US face rising food prices — particularly rice and ingredients imported from Asia.
Broader, Vietnamese Americans with transpacific business relationships — import-export, logistics, tourism — are experiencing halted operations. Shipping routes for goods from Vietnam to the Middle East and Europe pass through the South China Sea then the Indian Ocean before reaching Hormuz; disruption at this strait affects the entire regional logistics chain.
Historical Lessons and Comparisons
The current crisis recalls the 1973 oil shock, when Arab nations embargoed oil to the US and its allies, causing oil prices to quadruple in months. The result was a global economic recession lasting years. But there is an important difference: in 1973, Asia was not yet the center of global manufacturing. Today, as global supply chains depend deeply on Asia, an energy crisis in the region could cause far greater economic damage than half a century ago.
Comparison with the 2024 Red Sea crisis caused by Houthi forces is also useful. Then, shipping costs rose and supply chains were disrupted, but alternative routes via the Cape of Good Hope remained viable. With Hormuz, there is no true alternative route for the colossal volumes of oil and LNG passing through it — land pipelines can only handle a small fraction of total throughput.
Outlook: Winners and Losers?
In the short term, the crisis creates a clear map of winners and losers:
| Group | Impact |
|---|---|
| Energy-import-dependent Asian nations (Vietnam, Bangladesh, Philippines) | Bear the heaviest damage — inflation, production disruption, social instability |
| China | Less damage due to strategic reserves and relations with Iran and Russia, may increase geopolitical influence |
| US (as an oil producer) | Oil companies benefit in the short term, but US consumers still face higher prices |
| Russia | Benefits from high oil prices and increased energy exports to Asia |
| Global farmers | Rising fertilizer prices, increased production costs, rising food prices consequently |
Long-term, the crisis raises structural questions for the entire global energy and trade system. If the Chinese yuan gains wider acceptance in energy transactions, the US dollar's position will gradually erode. If Asia accelerates its transition to renewable energy — something many regional governments have committed to but not implemented quickly enough — the crisis could become a catalyst for structural change. But in the present, hundreds of millions of people from Hanoi to Dhaka face immediate reality: electricity prices rising, rice prices rising, and a sweltering summer with precarious energy supplies.
For the Vietnamese-American community, this is a time to closely monitor conditions at home, prepare for rising remittance and living costs, and recognize that the Middle East conflict — distant geographically — is pulling Vietnam and the United States into the same economic whirlwind.