Middle East Conflict Escalates: How Are Asia and Vietnam Affected?

An oil rig with the Iranian flag – Photo: REUTERS

Tensions in the Middle East are escalating rapidly following the U.S. strike on Iran’s Fordow nuclear facility – one of the most heavily protected sites in the country. The risk of a major military conflict is very real, potentially triggering significant disruptions to global energy markets, supply chains, and the world economy.

Hormuz Strait Becomes a Global Flashpoint – Asia Faces a Double-Edged Crisis

As the Strait of Hormuz becomes a global hotspot, Asian countries are facing dual pressures from rising prices and energy supply risks. Vietnam, though not directly involved, is also affected through disruptions in transportation and heightened risks to production and exports.

Middle East Conflict leads to Vietnam Faces Downstream Pressure

After nearly two years of threats from the Houthis, the recent U.S. attacks on three Iranian nuclear facilities could force many ships to reroute via the Cape of Good Hope, bypassing both the Strait of Hormuz and the Suez Canal.

An escalation in conflict with Iran would lead to surging transportation and insurance costs, along with prolonged delivery times. In response, logistics providers and supply chain managers in the U.S. are likely to increase inventory stockpiles—much like they did during previous tariff hikes.

Meanwhile, Vietnam is far from immune. Transportation and fuel costs are expected to rise, coupled with longer delivery times, which will place mounting pressure on exporters. Many may be forced to accelerate production.

“But that’s a tough ask, as most factories are already operating at full capacity in preparation for upcoming tariff hikes,” said Mr. Nunzio De Filippis.

Middle East Conflict and Hormuz Strait: A Global Oil and Gas Transit Chokepoint

Any disruption in the Strait of Hormuz could cause oil prices to skyrocket and fuel inflation in the U.S. – Photo: REUTERS

The Strait of Hormuz is an extremely critical corridor in global energy trade. According to the U.S. Energy Information Administration (EIA), around 84% of crude oil and condensate and 83% of liquefied natural gas (LNG) transported through Hormuz in 2024 were destined for Asian markets.

If conflict erupts, Iran’s oil production—over 1 million barrels per day—could be severely disrupted. A full blockade of the Strait could lead to a global shortfall of 5–10 million barrels of oil per day. Brent crude oil prices may surge to USD 120–150 per barrel, or even surpass USD 200 if the crisis persists.

Such a spike in oil prices would fuel global inflation, especially in energy-importing nations like India, Bangladesh, and many Southeast Asian economies. An increase of USD 50 per barrel could add over USD 1 trillion annually to global energy costs, severely impacting economies and people’s livelihoods.

KVN Logistics – A Trusted International Logistics Partner

In the face of growing geopolitical uncertainties in the Middle East, Asian economies – including Vietnam – must proactively prepare adaptive scenarios. Diversifying energy sources, strengthening supply chains, and promoting domestic production resilience are essential steps to mitigate risks from global disruptions.

At KVN Logistics, we are committed to remaining a reliable partner in international shipping. We continuously monitor developments, optimize routes, and provide tailored logistics solutions to minimize risks and maintain the uninterrupted flow of goods – even in the most challenging conditions.

📦 KVN Logistics is always ready to support your business. Don’t hesitate to contact us for effective logistics consultation and solutions!

Source: Compiled from Tuổi Trẻ Newspaper and International Energy News

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