Asia’s oil dependence leaves it exposed after US-Israel strikes on Iran: Morgan Stanley

South China Morning Post · Mar 2, 2026 · Collected from RSS

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Asian countries are heavily reliant on imported oil and gas and could suffer serious economic fallout after the United States and Israel launched strikes on Iran, Morgan Stanley said.The manufacturing-intensive, export-reliant region was “more sensitive” to oil price volatility than Europe or the US, the New York-based investment bank said in a research note on Sunday.Asia’s oil and gas trade deficit stood at 2.1 per cent of gross domestic product, it calculated. Every sustained US$10 per-barrel increase in oil prices would reduce Asia’s GDP growth “directly” by 20 to 30 basis points, or 0.2 to 0.3 percentage points, the note’s authors said.Washington and Tel Aviv began a military campaign against Iran on Saturday amid negotiations over its nuclear enrichment programme. Tehran retaliated with attacks against US military assets in neighbouring Gulf states, raising concerns of disruption to global energy supplies.Investment banks were quick to issue warnings of potential surges in oil prices, while Asian markets opened lower on Monday amid fears that the escalating tensions could harm energy markets and supply chains.“Asia remains most dependent on oil and gas imports,” said the research note’s authors, led by Morgan Stanley chief Asia economist Chetan Ahya.“Ongoing geopolitical tensions, if sustained, will increase downside risks to Asia’s macro outlook – as supply-side-driven oil price spikes will weigh on growth and macro stability risks,” they added.