Kenny Polcari, chief market strategist at SlateStone Wealth, discusses the outlook for markets amid reports of a US peace proposal to Iran, Jamie Dimon’s comments on the Iran war and investment strategy on ‘Varney & Co.’
The final phase of the war against Iran focuses on the Strait of Hormuz and critical energy infrastructure. Its effects are visible thousands of miles away in Asia.
Asia is on the front lines of the energy crisis, with shortages affecting almost every country. According to the International Energy Agency, roughly a fifth of the world’s oil flows through the Strait of Hormuz, while about 80% goes to Asia.
As Iran refuses to open the strait, Asia is trying to limit disruptions and is being forced to take measures reminiscent of COVID-era actions.
Asia is particularly sensitive due to its high import dependence, weaker currencies and large population. And the impact has hit households quickly.
The conflict has disrupted sectors ranging from air transport and shipping to gas supplies. People are struggling to cook and businesses across the board are bearing the brunt of slow imports of liquefied petroleum gas.
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Commercial ships are photographed off the coast of Dubai on March 11, 2026. (AFP via Getty Images/Getty Images)
Widespread disruptions have particularly affected South Asia, which is extremely dependent on oil from the Middle East. India, which imports nearly 90% of its crude oil and about half of its natural gas from abroad and is the world’s third-largest oil importer and consumer, is particularly vulnerable.
Yesterday, President Donald Trump and Indian Prime Minister Narendra Modi spoke on the phone, their first call since the outbreak of the February 28 war. In a post on
The Strait of Hormuz serves as a conduit for more than 40% of India’s crude oil imports.
This week two tankers left for India through the strait. Ships linked to China, Pakistan and Thailand have also successfully sailed through, while several other Asian governments are in talks with Tehran to secure passage.
But much of these imports are expected to be used for non-electrical, industrial purposes such as fertilizer production, leaving the public in the lurch.
In a new move that shows the precariousness of the situation, India’s Reliance Industries, which operates the world’s largest refinery, has reportedly bought 5 million barrels of Iranian oil. The deal marks India’s first such purchase since 2019 and comes days after the US temporarily lifted sanctions.
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Qatar Energy facilities in Mesaieed Industrial City, south of Doha, on March 4, 2026, after the company announced a freeze on LNG production following reported Iranian attacks. (Stringer/Getty/Getty images)
It’s a similar story across much of the subcontinent.
Two of Asia’s most advanced economies have also been hit hard. But while South Asia is experiencing this more at the household level, Japan and South Korea are facing a different kind of tension.
The two East Asian countries are being rocked by rising import costs, forcing factories to scale back and governments tapping into emergency reserves.
Japan, which imports more than 90% of its oil from the region, has started tapping strategic reserves. South Korea is considering releasing reserves and emergency support measures.
Unlike India, both countries have larger financial buffers and energy reserves, allowing them to absorb the immediate impact even as structural risks remain high.
Strikes are affecting many countries, such as India, Bangladesh and the Philippines, as frustrations grow. Online rumors add to the chaos and cause panic buying. In a few countries, such as India, police are deployed at gas stations.
Mount Fuji and the Shinjuku skyline as seen from an observation deck in Tokyo, Japan, on December 26, 2023. (Akio Kon/Bloomberg via Getty Images/Getty Images)
As Asia grapples with this energy crisis, many countries are now turning to coal and fuelwood to meet their gas needs.
Induction cooking equipment is flying off the shelves in LPG-dependent India, and early warning signs are emerging elsewhere in the region. Energy shocks now also appear on dining tables.
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Japan and South Korea are accelerating their plans to boost nuclear energy.
Several Asian countries have also drawn gasoline and diesel from domestic reserves, temporarily relaxed fuel standards and ramped up domestic production.
Emergency regulatory measures are beginning to sweep the region, from severe austerity measures in Sri Lanka to strict fuel rationing in Bangladesh.
People refuel their motorcycles at a gas station in Dhaka, Bangladesh, on March 17, 2026. (Mamunur Rashid/NurPhoto via Getty Images/Getty Images)
The Philippines just became the first country to declare a national energy emergency, warning of “an imminent danger of critically low energy supplies.” The island imports 98% of its oil from the Gulf.
In the meantime, China just called back about planned increases in fuel prices in an attempt to reduce “the burden” on the population.
Some governments are also considering stimulus packages and energy-saving campaigns are flooding social media, while record high costs are hitting household budgets.
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