Europe is beginning to feel the Iran war less as an external geopolitical event and more as a domestic economic shock. The immediate problem is the familiar one: higher oil and gas prices feeding inflation.

But the deeper danger is that the continent is being pushed back toward the same uncomfortable policy mix it struggled through after Russia’s invasion of Ukraine: weaker growth, higher energy costs, renewed pressure on public finances, and the possibility that central banks may have to tighten even as activity slows.

The disruption of petrochemical flows through the Strait of Hormuz is now spilling well beyond the energy sector and into the everyday industrial materials that sit behind consumer goods, manufacturing supply chains, and inflation. The latest squeeze is pushing prices for key plastics such as polyethylene and polypropylene to roughly four-year highs, reflecting both the loss of Middle Eastern supply and the sharp rise in crude- and naphtha-linked feedstock costs.

About $20 billion to $25 billion worth of petrochemical products normally pass through Hormuz each year, and that the Middle East accounted for more than 40% of global polyethylene exports in 2025.

The European Commission’s message to EU governments is simple: refill gas storage early, even if there is no immediate physical supply emergency, because waiting could turn today’s price shock into next winter’s security problem. In a closed-door meeting on Thursday, Brussels told member states to begin injecting gas into storage from April rather than risk a scramble later in the year.

The advice reflects a growing concern in Europe that the Iran war, while not yet cutting off the continent’s main gas suppliers, has already pushed prices high enough to create a dangerous incentive to delay buying until too late.

India’s plan to open talks with Argentina, Indonesia, and Oman over steelmaking raw materials reflects a broader shift in the country’s industrial strategy: New Delhi is no longer content to rely on opportunistic imports for the inputs that underpin both heavy industry and the energy transition.

Instead, it is trying to build a more deliberate external resource strategy around steel, stainless steel, and critical minerals at a moment when domestic demand is rising and global supply chains are becoming more politicized. Discussions are expected to begin next month at a major global steel summit in India, with the country seeking greater access to coking coal, iron ore, ferronickel, lithium, and related technology.

Governments across Asia-Pacific are now moving from observation to active crisis management as the Iran war continues to disrupt energy markets, pressure currencies, and unsettle local bond and equity markets. The common thread is not a single coordinated regional strategy, but a growing recognition that the shock is no longer confined to imported fuel bills.

It is feeding into inflation expectations, funding conditions, and financial stability concerns, forcing authorities to combine energy relief with liquidity support and market reassurance. Countries including South Korea, Japan, the Philippines, Australia, and New Zealand have all adopted or prepared emergency measures as the conflict drags on.

The market turmoil triggered by the Iran conflict is producing a level of investor stress that feels less like a normal geopolitical selloff and more like a systemic breakdown in the old playbook for managing risk. The core problem is not simply that equities are falling. It is that the usual refuges are failing at the same time.

Investors from Shanghai to New York are struggling with sharp moves across stocks, oil, bonds, gold, and currencies, while many say there is “no place to hide” apart from the US dollar.

Japan’s decision to urge domestic fuel wholesalers to use Brent rather than Dubai as the reference price for gasoline is a striking sign of how deeply the Iran war has destabilized Asia’s oil market. What might appear at first glance to be a technical pricing adjustment is in fact part of a much broader emergency response by Tokyo to contain the domestic economic fallout from a severe disruption in Middle Eastern crude flows.

Japan’s industry ministry, METI, asked wholesalers to move away from the Dubai benchmark because Brent, at around $100 a barrel, was trading far below Dubai, which had surged to nearly $170 and become the most expensive major crude marker in the world.

Asian refiners are starting to change not just what oil they buy, but how they price it. The immediate trigger is the extraordinary distortion in the Dubai benchmark, which has surged so sharply during the Iran war that some Asian buyers now see it as an unreliable basis for valuing imported crude, especially US barrels.

Several refiners have begun pricing US crude purchases against ICE Brent rather than Platts Dubai after Dubai spiked to a record $169.75 a barrel, briefly making Middle Eastern crude the most expensive in the world.