The tremors from political upheaval in the Middle East are rippling through energy-thirsty Asia, which has long struggled to kick its addiction to oil from the volatile region.
Resource-poor Japan, for example, buys 90 percent of its crude from the Middle East, while Singapore gets about 85 percent of its needs from the region and South Korea about 82 percent.
However, it is the developing countries that might be the hardest hit by the price spike.
“India and Thailand would struggle most within Asia if oil prices were to remain at their current level,” said Mark Williams, a senior economist at the London-based research firm Capital Economics.
“The region’s biggest loser would probably be India. Its current account deficit is already high, its economy is oil-intensive and fuel subsidies are a drain on already stretched government resources,” he said. “Thailand too is exposed due to its high reliance on oil and the large potential knock-on impact on inflation.”
Rising consumer prices are emerging as a top concern for policymakers in the region. India, which imports 80 percent of its crude oil needs, mostly from the Middle East, has seen fuel and petrol prices jump four times in the past year.
“By contrast, China seems relatively secure with the vast bulk of its energy coming from coal,” Williams said.
In Japan, Economy, Trade and Industry Minister Banri Kaieda warned last week rising oil prices were the biggest risk to the nation’s economic recovery.
In South Korea, authorities are even considering turning off unnecessary lighting and ordering public buildings to cut back on power use if oil prices do not fall.
Vietnam — grappling with double-digit inflation — recently raised petrol prices by 18 percent, but for another reason: a currency devaluation that increased the cost of imported fuel.
Not all Asian nations are net oil importers — Malaysia produces more than it consumes, but even it is not immune to the effect of higher prices.
“Higher oil prices will push up food, transport and other essential items,” said Wan Suhaimi Saidi, an economist at Kenanga Investment Bank Bhd in Kuala Lumpur.
Analysts said that while Asia is particularly vulnerable to the rising oil prices, they also have an advantage because their economies are in better shape than those of the West.
“In general, Asia’s strong growth would enable it to cope much better than the more fragile, albeit less oil-intensive economies of Europe and the US,” Williams said.