What are the current economic impacts, forecasts, and risks of the prolonged Strait of Hormuz closure on the Asia-Pacific region, as assessed by the ADB, IMF, Fitch, IEA, and other institutions, including specific effects on growth, inflation, poverty, oil imports, and fiscal out

Overview

The prolonged closure of the Strait of Hormuz—now effectively shut since early March 2026—has triggered the largest energy supply disruption in history, hitting Asia-Pacific hardest because 80–89% of Hormuz crude flows to Asia . Brent crude surged past $100/bbl by March 8 and peaked at $126/bbl , the EIA estimates ~7.5 million b/d of crude from Gulf producers has been shut in , and the IEA called it "the largest disruption in history" to oil supply . Below is the assessment by institution and by country.

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Assessments by Institution

Asian Development Bank (ADB)

• March 2026 (initial view): A short (≈1 month) disruption would have only a modest impact on developing Asia, but a prolonged closure would sharply increase energy prices and disrupt trade .
• The ADB has not issued a revised quantified forecast for the prolonged scenario as of latest available commentary.

International Monetary Fund (IMF)

• Reference scenario (April 2026 WEO): Assumes a short-lived conflict with a 19% increase in energy prices in 2026. Global growth forecast at 3.1% and headline inflation at 4.4% —a sharp reversal of the recent disinflation trend .
• Downside scenario: A longer shutdown of the Strait of Hormuz raises the prospect of a "major energy crisis," with significantly higher growth drag and inflation .
• The closure cut off access to ~20% of global oil and seaborne LNG supplies, and strikes/precautionary shutdowns reduced oil and gas output by an estimated 13 million b/d .
• MENAP (Middle East, North Africa, and Pakistan) growth projected to slow to just 1.4% even under the reference scenario .

Fitch Ratings

• Global growth (June 2026): Cut world growth forecast for 2026 to 2.4%, down 0.2 pp from prior, directly citing the oil shock from the US-Iran conflict and Strait of Hormuz closure .
• India: Cut FY27 GDP growth projection to 6.4% (from 6.7%), citing slowdown in the September and December quarters . Earlier in March, Fitch had flagged that costlier oil would slow India's growth in H1 FY27 and push inflation steadily to 4.5% by December 2026 .
• Fitch raised its near-term Brent crude price assumptions and noted that if the shock persists beyond a brief period, further downgrades would follow .

International Energy Agency (IEA)

• Called the blockage the "largest disruption in history" to oil supply .
• Global oil supply was slashed by 10.1 million b/d in March alone .
• The IEA warned the Strait's paralysis is the "greatest global energy security threat in history" .
• IEA expects global oil output to fall by ~1.5 million b/d on average in 2026 versus 2025—a ~2.6 million b/d swing from its pre-war March forecast .

OECD

• June 2026 Economic Outlook: Projected global growth slowing to 2.8% in 2026 (down from 3.4%) assuming energy prices begin subsiding by mid-2026. In a more pessimistic scenario where shipping and energy infrastructure damage persists, the slowdown would be steeper .

Wood Mackenzie

• Worst-case scenario: Global GDP growth could fall below 2% in 2026, with permanent economic scarring relative to the pre-war baseline. Brent crude could approach $200/bbl by end-2026 despite a 6 million b/d drop in global oil demand .

Allianz Research

• A sub-2-month Straits disruption would push average emerging-market inflation higher by +0.8–1.0 pp, with GDP growth impact of at least -0.5 pp for emerging markets excluding China .

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Country-Level Effects

🇵🇭 Philippines

• Extreme oil import dependence: The Philippines sources 96% of its oil from the Persian Gulf, the highest ratio among the four countries .
• The blow to fuel supply is severe—fuel shortages and price spikes have already rippled through transportation, shipping, and food prices .
• Growth/Inflation outlook: No institution-specific quantified projection found for the Philippines, but as the most Gulf-dependent importer in the group, the risk to growth and inflation is acute and above regional averages.

🇯🇵 Japan

• Japan is a major crude importer from the Gulf. The closure drives up its already-high energy import bill, worsens its trade deficit, and puts pressure on the yen.
• No institution-specific growth/inflation re-forecast publicly available for Japan alone, but Japan is highly vulnerable given its near-total dependence on Middle Eastern crude. The oil shock feeds directly into higher electricity, manufacturing, and transport costs.

🇹🇭 Thailand

• Thailand sources ~74% of its oil from the Persian Gulf . Fuel shortages and rationing have emerged, and higher energy costs are passing through to flights, shipping, Grab rides, and food prices .
• ICIS (April 2026): Reported that tumbling Asian currencies against the USD, combined with crude above $100/bbl, are "hitting otherwise resilient southeast Asian economies hard," including Thailand .
• No standalone ADB/IMF/Fitch GDP revision for Thailand found in available sources, but it is among the most exposed Southeast Asian economies.

🇮🇳 India

• Fitch (June 9, 2026): Cut India's FY27 GDP growth forecast to 6.4% from 6.7%, directly citing the US-Iran war .
• Fitch (March 2026): Estimated growth for FY26 at 7.5%, but flagged that costlier oil would slow India in 1H FY27 and push inflation steadily to 4.5% by December 2026 .
• India relies on the Gulf for roughly 60% of its crude imports. Higher oil prices widen its current account deficit and fuel imported inflation, straining fiscal balances as fuel subsidies or tax cuts may be needed.

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Cross-Cutting Risks

• Inflation shock: A 2-month closure could add 0.8–1.0 pp to EM inflation ; the IMF expects global headline inflation of 4.4% in 2026 even in a optimistic reference scenario .
• Poverty: Higher food and fuel prices disproportionately hurt low-income households in developing Asia. The IMF warned the impact would be "disproportionately" felt by developing countries .
• Fiscal outlooks: Oil-importing Asian governments face pressure to absorb price hikes via subsidies or tax cuts, widening fiscal deficits exactly when growth is slowing.
• Currency depreciation: Asian currencies tumbling against the USD amplify imported inflation for net oil importers .
• Recession risk: Wood Mackenzie sees global GDP growth potentially falling below 2% if the closure persists , a level historically associated with global recession conditions.

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Key caveat: The situation is rapidly evolving (as of mid-June 2026). Most institution forecasts assume a resolution by mid-2026; if the Strait remains closed into H2 2026, all current estimates would be revised downward significantly.