The war in the Middle East has triggered an energy shock, pushing up oil and gas prices across Asia and the Pacific. This is driving inflation higher, widening trade deficits, and constraining government responses in fuel-importing economies. Asia entered 2026 resilient amid prior trade tensions and US-China rivalry, but the crisis now tests regional stability. Geopolitical risks persist from competition over maritime routes like the Malacca Strait and potential flashpoints in Taiwan and Korea.
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