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The report examines how disruption or blockade of the
Strait of Hormuz impacts major Asian economies, especially China, Japan, and
Vietnam.
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The Strait of Hormuz normally carries around 20 million
barrels of oil per day, accounting for nearly one-quarter of global maritime
oil trade, with 80% destined for Asia.
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The report says the 2026 Iran conflict has triggered a “polycrisis” involving geopolitical tensions, trade
disruptions, and maritime blockades.
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China entered the crisis with the strongest strategic
position among the three countries due to large crude oil stockpiles,
diversified energy sourcing, and strong renewable energy capabilities.
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China is estimated to hold around 1.4 billion barrels of
crude oil in strategic and commercial reserves, enough to cover more than six
months of domestic demand.
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Over half of China’s crude imports still depend on Gulf
suppliers, including undeclared Iranian oil imports.
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China has strengthened energy security through pipeline
imports from Kazakhstan and Central Asia, reducing dependence on maritime
routes.
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The report highlights China’s leadership in electric
vehicles (EVs), batteries, solar panels, and coal-to-chemicals technology as a
major strategic advantage during fuel supply disruptions.
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Nearly half of newly registered vehicles in China are new
energy vehicles (NEVs), helping reduce fuel demand pressures.
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China’s coal-to-chemicals industry enables production of
petrochemicals without reliance on Gulf-origin naphtha, giving it greater
resilience.
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The report notes that China could emerge as a major
supplier of renewable technologies and petrochemicals to countries seeking
alternatives to Gulf energy dependence.
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However, China remains vulnerable to weak global demand due
to industrial overcapacity and slowing import growth in export markets.
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Japan remains heavily dependent on imported crude oil, with
about 95% of crude imports sourced from the Middle East and around 70%
transiting through Hormuz.
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Japan has strategic oil reserves that provide short-term
cushioning, but the report says the country has limited room for industrial
adjustment compared to China.
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Japan is increasingly relying on US crude oil supplies and
may deepen dependence on coal, LNG, and nuclear power to secure energy
supplies.
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The Japanese government is considering energy subsidies to
stabilize electricity and gas prices amid rising fuel costs.
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Japan’s petrochemical industry has been severely affected
because around 40% of domestic naphtha supply previously came from the Middle
East.
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Major Japanese chemical companies have reduced production
due to shortages and surging naphtha prices.
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Japanese manufacturers face shortages of chemicals,
adhesives, solvents, and aluminum, threatening
production across automotive, construction, packaging, and electronics sectors.
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The report warns that a global jet fuel shortage could
severely disrupt Japan’s air freight-dependent export economy, particularly
electronics and semiconductor equipment exports.
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Vietnam is identified as the most vulnerable “connector
economy” due to its dependence on Gulf crude oil, plastics feedstocks, and
global manufacturing supply chains.
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Nearly 80% of Vietnam’s crude oil imports in 2025 came from
Kuwait via the Strait of Hormuz.
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Kuwait Petroleum Corporation’s supply disruptions and
refinery damage significantly affected Vietnam’s Nghi Son Refinery, which
supplies up to 40% of Vietnam’s oil demand.
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Vietnam lacks major strategic oil reserves and has limited
ability to compete globally for alternative energy supplies.
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Fuel prices in Vietnam surged sharply, forcing the
government to suspend fuel taxes and use stabilization funds to contain
inflationary pressure.
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Vietnam’s plastics and petrochemical industries face major
risks because they depend heavily on Gulf-origin ethylene and naphtha-based
feedstocks.
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The report estimates disruptions to Vietnamese plastics
exports could create a US$9.4 billion shock to global plastic goods supply
chains.
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Vietnam’s role as a major exporter of laptops, electronics,
plastics, and industrial products means disruptions could affect the US, Japan,
China, and ASEAN economies.
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The report predicts Vietnam may increasingly turn toward
Chinese renewable energy technologies and EVs after the Hormuz crisis.
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The report concludes that the Hormuz crisis demonstrates
how energy security and petrochemical diversification have become central to
national economic resilience.
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Extended disruption in Hormuz could significantly weaken
global economic activity by removing access to oil, jet fuel, plastics
feedstocks, and other critical industrial inputs.
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Countries may increasingly face a strategic choice between
continued dependence on diversified fossil fuel supplies or accelerated
investments in renewables, batteries, nuclear energy, and EV infrastructure.
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The report argues that future global trade and energy
systems may become increasingly divided between US-led fossil fuel supply
networks and China-led renewable technology ecosystems.