Russell Group: Hormuz disruption hits Asian trade as Iran war enters second month

Trade flows across Asia are coming under increasing strain as the war in Iran enters its second month, with disruption to key energy shipments through the Strait of Hormuz beginning to feed into broader economic impacts.

New analysis from Russell Group focuses on the impact on Asian countries and points to crude oil and liquefied gas as the most immediate pressure points, with knock-on effects emerging across multiple industrial supply chains.

The data shows a significant concentration of energy exports trapped in the region.

Russell estimates that 64% of crude oil exports and 96% of LPG exports scheduled during the first month of the conflict remain stalled in the Strait of Hormuz.

These shipments were primarily destined for major Asian economies, including India, China, Japan, South Korea and a number of Southeast Asian markets.

The disruption is already feeding through into wider commodity flows, according to the aviation, marine and speicialty lines risk consultant.

Industrial gases, fertilisers and aluminium, all of which are closely linked to Gulf energy production, are also being affected, according to the analysis.

Russell’s analysis suggests that 75% of industrial gas exports, 49% of fertiliser shipments and 15% of aluminium exports from the Gulf were due to head to the same group of countries now facing supply constraints.

This is beginning to translate into measurable trade impacts.

Japan is expected to see a 10% decline in trade volumes as a result of the disruption, while India faces a 9% drop and South Korea around 6%.

The figures underline the extent to which regional economies remain exposed to energy transit through the Gulf, particularly via the Strait of Hormuz.

Suki Basi, managing director at Russell, said the conflict’s effects are becoming increasingly visible.

“The war in Iran has now reached one month, with no end in sight,” he said.

“The disruption to the global economy has been restricted to the nearby region of Southeast Asia, as our data indicates,” he continued.

“Yet, continued disruption to industrial gases such as helium, fertiliser and aluminium will respectively affect AI developments, agriculture, and the wider economy,” he added.

The analysis highlights the breadth of potential downstream impacts.

Helium shortages could affect semiconductor manufacturing and AI-related industries, while fertiliser constraints raise concerns for agricultural output and food supply chains.

Aluminium disruption, meanwhile, has implications for manufacturing and construction sectors across the region.

Basi warned that the longer the conflict persists, the greater the risk of wider economic consequences.

“Consequently, there is the possibility that the longer this war drags on, the greater the likelihood of a knock-on effect to the global economy, because of potential shortages of key commodities,” he said.

“Therefore, it is imperative that businesses and governments start implementing policies and measures to ensure that they are resilient to potential disruptions should this conflict continue,” he added.