Kuwait city: Sri Lanka and Malaysia: Sri Lanka and Malaysia moved Wednesday to assess the economic fallout from rising oil prices linked to the Middle East conflict, joining Pakistan, Bangladesh, and Thailand, which have already introduced austerity measures.
According to Anadolu Agency, Pakistan, Bangladesh, Thailand, India, South Korea, and Nepal rely heavily on imported oil, leaving them particularly exposed to supply disruptions and higher energy costs. Trinh Nguyen, a senior economist at Natixis, noted on the US social media company X: ‘Demand destruction happening. First, Pakistan and Bangladesh. Next, Southeast Asia.’
In Kuala Lumpur, Prime Minister Anwar Ibrahim announced a special two-day Cabinet meeting scheduled for Friday to review Malaysia’s fiscal position, as reported by state-run Bernama. Despite Malaysia’s status as a net energy exporter offering some security against immediate shortages, officials assured that petroleum supplies are sufficient through at least May.
Sri Lanka’s Parliament is set to engage in a two-day debate next week concerning the Middle East conflict and its potential repercussions on the country’s fuel imports, according to the Daily Mirror. In response to the crisis, Pakistan and Bangladesh have implemented austerity measures such as work-from-home policies, reduced transportation, and fuel rationing. Thailand has also reduced energy consumption in government offices and promoted remote work.
To mitigate reliance on traditional suppliers amid disruptions, Bangladesh has secured oil supplies from Malaysia, India, and Singapore. Meanwhile, Nepal plans to send a chartered flight to Dubai to evacuate stranded passengers as regional tensions rise. The urgency stems from concerns for the 700,000 Nepali workers residing in the UAE, heightened after a Nepali security guard was killed in a drone attack at Dubai’s Zayed International Airport.
In South Korea, Son Joo-suk, head of the Korea National Oil Corp., apologized for the steep price increases at some government-run fuel stations amid rising costs due to the conflict, as reported by Yonhap. India, which imports nearly 90% of its crude oil, has managed to absorb price shocks so far. However, Moody’s cautioned that India remains vulnerable, given that its strategic petroleum reserves cover only about 10 days of consumption, while commercial stocks cover roughly 65 days.
The regional tensions were exacerbated after the US and Israel launched a joint attack on Iran on February 28, which, according to Tehran, resulted in over 1,200 deaths, including that of former Supreme Leader Ayatollah Ali Khamenei and 150 schoolgirls. Iran has retaliated with drone and missile strikes targeting Israel, Jordan, Iraq, and Gulf countries hosting US military assets. Additionally, Tehran has effectively closed the Strait of Hormuz since around March 1. This narrow shipping route typically transports about 20 million barrels of oil per day and accounts for roughly 20% of global liquefied natural gas trade.