Analyst: Gulf conflict will intensify inflation and economic pressure in Asia

Golden Ten Data reported on March 12 that Garfield Reynolds, head of the MLIV Asia team, stated that as global crude oil benchmark prices return to triple digits, Asian stock markets are experiencing expanded declines and continued market pressure. This trend may further intensify, as soaring oil prices also signal potential supply shocks in the natural gas and fertilizer sectors, which are particularly significant for many major economies in the region. The sharp and volatile rise in oil prices is the most direct consequence of the de facto closure of the Strait of Hormuz. Although global dependence on oil is not as strong as in the past, the Persian Gulf remains a key hub for global trade. Given the global energy structure's shift towards natural gas in recent years, viewing it as a cleaner alternative fuel for power generation compared to oil and coal, the role of natural gas is becoming increasingly prominent. Natural gas is also crucial for fertilizer producers, especially after the Russia-Ukraine conflict disrupted major sources of natural gas and potash. All of this means that Gulf conflicts may exacerbate inflationary pressures in Asia and drag down economic growth.