[AP Photo]
Asia’s first defenses against energy shocks from the Iran war are running short and a more consequential second wave of impacts is beginning to hit.
When the war started, governments scrambled to adapt to the closure of the Strait of Hormuz, a critical artery for energy flowing to Asia.
They made difficult trade-offs: saving power at the risk of slowing businesses, prioritizing gas for households at the risk of fertilizer production and dipping into energy stockpiles for temporary relief.
But these measures were based on the war lasting only a short time, allowing a quick resumption of energy flows. That has not happened.
With no clear end in sight, the fuel crisis is now rippling across economies. Airfare costs, shipping rates and utility bills are climbing, jeopardizing economic growth.
About 8.8 million people are in danger of being pushed into poverty and the conflict may cause $299 billion in economic losses to the Asia-Pacific region, according to the United Nations Development Program.
Asian governments planned their budgets assuming the price of oil would average around $70 a barrel.
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