The Iran War’s Lasting Scars Across Asia
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Podcasts. Radio. News. We begin the week with the US and Iran having reached an interim deal to end hostilities and reopen the Strait of Hormuz.
The news sent oil prices lower and sparked a relief rally across Asian markets. Officials from both countries set to meet now in Switzerland on June the 19th, where the agreement will be formally signed.
Everyone has discovered from the past six years that these big one-off, supposedly one-off disruptions can happen with frequency.
That's Bloomberg's Tracy Alloway. Tracy co-hosts the Odd Lodge podcast, and she spends a lot of time looking at the long-term impacts of geopolitics on the global economy.
And so the lesson that everyone's been internalizing is that you need to build up stockpiles, you need to have independence in terms of your crucial supplies, you need to have additional capacity.
And few places have shown the need for independence and extra capacity more clearly than in Asia over the past few months. After the U.S. and Israel went to war with Iran, the Strait of Hormuz grounded to a halt, choking off supplies of virtually every major commodity. including one-fifth of the world's oil.
But I think a lot of great things are going to happen to the Middle East right now. And very importantly, the oil is plummeting down.
At the G7 summit in France, President Trump touted a deal the U.S. reached with Iran's regime over the weekend, which he says will reopen the Strait of Hormuz.
Essentially, ships are starting to go out. Now, on Friday, it'll be completely opened.
Across Asia, countries are welcoming the U.S.-Iran peace deal that would help to stabilize global energy prices and reopen a vital shipping route. But many are skeptical that will happen. And even if it does, for Asia, that shift might be too little, too late.
There is this brewing but not yet impacting food issue that will arise in Southeast Asia specifically.
That's Bloomberg's Joe Weisenthal. He co-hosts Odd Lots with Tracy.
The closure of the Strait of Hormuz is going to create a food stress in much of the world during the next planting season. And if there's food stress, people will be buying food and not random manufactured goods in China come that time. And so there may be an element where China is choosing to reduce its imports so that its customers of manufacturers have more capacity come next year.
Welcome to the Big Tech Asia from Bloomberg News.
What is the significance of the U.S.-Iran interim deal for Asia?
I'm Wan Ha. Today, I'm sitting down with my colleagues, Tracey Alloway and Joe Weisenthal, co-hosts of Bloomberg's Odd Lots podcast. We recorded this conversation just before news broke that Iran and the US may have struck a deal to reopen the Strait of Hormuz. And as you'll hear, this discussion is arguably just as relevant now as when we taped it. While the reopening of the Strait would be a welcome relief, the structural shifts caused by the conflict have fundamentally changed businesses across Asia. And the resulting pressure on food and energy supplies and prices isn't going away anytime soon. On today's show, we dive into why Asia is feeling more economic pain from this conflict than Western nations and what the new normal looks like for the region and the rest of the world.
While the details of the proposed new deal between the U.S. and Iran remain unclear, one thing is certain. War in Iran and the virtual closure of the Strait of Hormuz have effectively slapped a war tax on vital products, and it's impacted every corner of the global economy. You've probably felt the pinch in one way or another, but its effects haven't been distributed evenly.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–3:28
2
What is the significance of the U.S.-Iran interim deal for Asia?
3:28–8:19
3
How has the closure of the Strait of Hormuz affected global supply chains?
8:19–12:59
4
What are the implications of rising food stress in Southeast Asia?
12:59–18:33
5
How are Asian countries coping with energy price shocks?
18:33–21:39
Speakers
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