Source: scmp.com
Image content: The image shows a man standing up through a car’s sunroof with arms raised, holding a large curved horn. He’s surrounded by a crowd waving green-white-red flags and taking photos, giving the scene a lively, celebratory or protest atmosphere in an urban setting.
Summary
Escalating Iran-Israel tensions are reverberating through energy markets, aviation, and Indo-Pacific security. Oil briefly rose on U.S. strikes in Iran but eased as a Strait of Hormuz shutdown seemed unlikely; nonetheless, targeted disruptions or Israeli strikes on Iranian energy assets could push Brent above $80, while a worst-case Hormuz closure might spike prices near $130 and dent global growth. China, now absorbing roughly 90% of Iran’s crude via a sanctions‑evading fleet, faces energy security risks from any shipping disruption but holds record stockpiles and alternative, albeit costlier, supply options. In aviation, Western carriers face longer, more expensive Europe‑Asia detours due to Middle East and Russian airspace restrictions, while Chinese airlines maintain route advantages through Russia. Strategically, U.S. focus on the Middle East raises anxieties in the Philippines and Taiwan about reduced American bandwidth in the Indo‑Pacific, potentially offering China openings in the South China Sea and the Taiwan Strait.
Key Points
- Oil markets remain sensitive to Iran-Israel risks, with major spikes likely only if the Strait of Hormuz is disrupted.
- China’s energy security is exposed to Iranian supply and shipping routes, though buffered by large stockpiles and alternative sources.
- Chinese airlines gain a competitive edge as Western carriers face compounding Middle East and Russia airspace restrictions.
- U.S. attention drawn to the Middle East raises Indo-Pacific concerns in the Philippines and Taiwan about deterrence and support.
- Near-term U.S. gasoline prices may rise modestly amid elevated geopolitical tensions.