Crematoria Shut Down, Fried Chicken Off the Menu... Middle East War Triggers Global Energy Shock

As the Iran war enters its third week, concerns over an “energy shock” are growing across the globe. After the closure of the Strait of Hormuz, countries heavily dependent on oil and gas imports have shut down factories. In some places, even the lights in crematoria and restaurants have been turned off, threatening the daily lives of citizens.

According to Bloomberg News on March 16 (local time), the Australian government has warned that maritime transportation could be disrupted if the Middle East conflict is prolonged. Currently, gasoline and diesel supplies remain stable. However, regardless of the government’s announcement, panic buying has occurred, especially in remote areas where energy security is critical. At one point early in the Iran war, gasoline prices at gas stations rose faster than international benchmarks.

Although Australia is one of the world’s largest exporters of coal and natural gas, it does not produce enough crude oil to meet domestic demand. Due to competition with Asian countries in refining technology, only two aging refineries remain in Australia. The fuel produced here accounts for less than a quarter of total consumption, with the remainder entirely dependent on imports.

The rise in oil prices in Australia is not just a domestic issue; it could seriously disrupt global supply chains. Lourenço de Melo, senior professor at Macquarie University, said, “Australia relies on diesel from Korea, Japan, and Singapore, so if these countries experience disruptions in crude oil supply, the impact will spread worldwide. There are very few alternative sources of supply.”

Australia’s exports in the mining and agriculture sectors are among the most diesel-intensive industries. Professor de Melo explained, “Healthcare and transportation are also the most vulnerable sectors to fuel shortages.”

Bloomberg News also reported that Australia’s major fuel suppliers have already stopped spot sales. This means they have suspended one-off sales of spare inventories due to anticipated shortages of crude oil.

Industrial sites are also suffering. Farmers have warned that if soaring fuel prices persist, farmland may be left idle ahead of the planting season. The transport industry has cautioned that increased logistics costs caused by shortages in remote areas will inevitably lead to higher consumer prices.

Australia maintains an emergency stockpile of diesel, jet fuel, and gasoline sufficient for one month. However, this is far below the 90-day level recommended by the International Energy Agency (IEA). The Australian government has also reduced mandatory stockpiles for major importers and refineries by about 20%.

Japanese petrochemical companies recently announced production cuts amid concerns that the Iran war would disrupt supplies of naphtha, a key raw material for plastic manufacturing. Naphtha, refined from crude oil, is used in a wide range of products including plastic bottles, construction materials, and home appliances. Japan procures 60% of its naphtha from overseas, and more than 70% of those imports come from the Middle East.

Joel Shimon, senior analyst at Pelham Smithers Associates, said, “The further downstream you go, the more companies will be affected. It highlights just how reliant we are on petroleum products.”

South Asian Countries at a Standstill Amid Energy Crisis

South Asian countries that depend on gas imports from Gulf states have seen daily life come to a halt due to the energy crisis. In India, crematoria have stopped using gas to cremate bodies, and restaurants are unable to prepare fried foods. Pakistani government officials have shifted to a four-day workweek, while in Bangladesh, universities have closed and exams have been canceled.

Indian Prime Minister Narendra Modi told the public, “There is no need to panic.” However, reports of panic buying, theft, and price gouging have surfaced across India as citizens scramble to secure liquefied petroleum gas (LPG) for cooking. India is the world’s second-largest importer of LPG, with 60% of its supply coming from the United Arab Emirates, Kuwait, Qatar, and Saudi Arabia.

The Indian government has allowed restaurants to cook using coal or kerosene, which emit more pollutants. The National Restaurant Association of India has recommended to its 500,000 members to consider shortening operating hours and suspending the sale of menu items that require long boiling or frying times.

Saleh Sibli, spokesperson for the Prime Minister of Bangladesh, said, “Prime Minister Tarique Rahman uses only half the lights in his office and does not turn on the air conditioner unless it is an emergency. Such energy-saving measures are being implemented at all government offices nationwide.” Bangladesh imports 95% of its energy supply.

This content was produced with the assistance of AI translation services.