War in Iran: The International Monetary Fund Raises the Alarm for the Asia

At the end of 2025, growth had been stronger than expected. And this year had started off well in the Asia-Pacific region with exports exceeding forecasts. But the IMF (International Monetary Fund) warns of the region’s vulnerability to the energy crisis linked to the conflict in the Middle East, involving the USA and Iran.

A region Asia-Pacific weakened by its dependence on oil and gas imports

The rise in oil and gas costs weighs on the GDP, the gross domestic product of the Asia-Pacific region, as pointed out by Krishna Srinivasan, director of the Asia-Pacific department of the fund: “Oil and gas consumption represents around 4% of the region’s GDP, despite variations between countries. This percentage is almost double that of Europe. There is also a strong heterogeneity. For example, oil and gas consumption surpasses 10% in Malaysia and Thailand, but only 2% in Australia and New Zealand. Secondly, low domestic production means that this high energy intensity results in a dependence on imports.”

Australia forced to seek regional solidarity after an incident at one of its refineries

Even though Australia seems better off than others, the incident at one of its refineries has led to emergency securing of its supplies. 100 million liters of diesel will arrive from Brunei and South Korea. And the Malaysian national company Petronas, among others, will also be involved. This is what Anwar Ibrahim, the Malaysian Prime Minister, promised during a meeting with his Australian counterpart: “Regarding fuel, Petronas assured us that once national needs are met, there will clearly be a surplus and we are assured that priority will be given to Australia.”

Solidarity in both directions with Malaysia

A longstanding reciprocal solidarity in a win-win system, as recalled by Anthony Albanese, Australian Prime Minister: “This conflict has caused unprecedented disruptions in global energy supply. To meet this challenge, Australia is working in collaboration with its close allies, including Malaysia. Australian resources contribute to the energy supply of our region, while our farmers contribute to its food supply. Nearly 60% of Malaysia’s wheat and 75% of its lamb and beef come from Australia, and our neighbors know that providing fuel and fertilizers to Australia helps ensure food security in this region.”

Decline in growth and inflation on the horizon

The oil crisis will therefore boost regional cooperation. Nevertheless, the IMF believes that growth in the Asia-Pacific region will decrease from 5% in 2025 to 4.6% this year and 4.2% in 2027. And inflation is expected to accelerate…

(Re)watch Bruno SAT’s reportage.