OTR: War's Ripple Effect: How the Iran Conflict Could Starve Asia

The Middle East conflict may be thousands of kilometres from Asia's rice fields, but the impact is already being felt. Disruptions to global oil supply stemming from the Iran war are setting off a chain reaction that food security analysts warn could culminate in one of the worst regional hunger crises in decades.

Asia, and Southeast Asia in particular, runs on oil it does not largely produce. More than 60 percent of East Asian nations' energy needs are sourced from the Middle East. When conflict disrupts those supply lines, fuel prices spike — and with them, the cost of almost everything that puts food on the table. It’s a familiar scenario for New Zealand, although this country is in a somewhat better position in terms of food production.

But in the rice-farming heartlands of Cambodia, Thailand, and Vietnam, that spiral is already under way. Diesel — for tractors, irrigation pumps, and the trucks that take harvests to market — has become cripplingly expensive. Fertiliser, much of which travels through the same shipping lanes, is becoming scarce and costly in some places. Farmers who once operated on thin margins are now confronting costs that make planting a losing proposition. Agricultural economists in Asia project that rice production across the region could fall sharply, with downstream consequences for food prices across the region.

Relief organisations estimate that over 300 million people across Asia could face severe food shortages if the conflict continues in its present confused state. Models tracking acute food insecurity already paint a bleak picture, but the Iran War has the potential to make things far worse.

Some governments are scrambling to cushion the blow. Malaysia has moved to expand fuel subsidies, attempting to shield consumers and farmers from the worst of the price surge. But economists caution that such measures are financially unsustainable and risk accelerating inflation in other parts of the economy. Public finances across the region have been strained by pandemic-era spending; absorbing an open-ended oil shock on top of that is a task few Asian governments are equipped for.

What makes the current situation particularly alarming is the way multiple crises are compounding one another. Some analysts have taken to calling it an "everything crisis":  fuel is expensive, shipping is constrained, fertiliser is scarce, and the political will to coordinate a regional response remains fragmented. Each factor amplifies the others, and the system as a whole becomes less resilient with every passing week the Iran conflict continues.

The crisis has also laid bare a structural vulnerability that policymakers have long acknowledged but done little to address: Asia's profound dependence on Middle Eastern oil. For decades, cheap and reliable energy imports allowed the region to industrialise, modernise its agriculture, and lift hundreds of millions out of poverty. That same dependency has now become a potential fault line.

However, many East Asian nations are now prioritising renewables, with China leading in solar/wind development and battery storage, Japan accelerating hydrogen and offshore wind, and South Korea boosting its solar energy infrastructure.

Asian markets are also increasing adoption of electric vehicles to decrease dependency on imported oil for transport, signalling a move away from reliance on Gulf oil.

The Asian rice-planting season is due to begin in a couple of weeks, and for farmers in the Vietnam’s Mekong Delta or Thailand’s Chao Phraya basin, the language of geopolitics is abstract. What is concrete is the price of diesel at the pump, the cost of a bag of urea, and the calculation of whether this season's harvest will cover this season's debts. For many farmers across Asia, that calculation is increasingly harder to make.

-Asia Media Centre