‘Compound shock effect’: why the Middle East crisis and El Niño could spell disaster in south-east Asia

What Happened

Iran has threatened to close the Strait of Hormuz and implement a system of maritime fees following Israeli strikes in Lebanon. This development follows a period of instability in the waterway that has already impacted energy and fertilizer supplies to Southeast Asia. The United Nations Food and Agriculture Organization (FAO) reports that the potential closure of the strait, combined with El Niño weather conditions, threatens 7–8 million tonnes of rice production in the Asia-Pacific region.

Key Actors

Why It Matters

The Strait of Hormuz is a critical chokepoint for global energy and fertilizer supplies. Southeast Asian nations, which rely on the Middle East for 60% of their crude oil and one-third of their gas imports, face significant economic pressure as energy import bills rise. The potential weaponization of this maritime route, coupled with climate-driven agricultural risks, threatens to increase global food prices and destabilize import-dependent economies.

Watch For

Monitor the conclusion of the 60-day negotiating period mentioned by Iran regarding the implementation of maritime fees. Additionally, track potential diplomatic responses from the International Maritime Organization and the ability of Southeast Asian nations to secure alternative energy and fertilizer supply chains.