Understanding Supply Chain Shocks Amid Hormuz Disruptions is ASEAN's Key Challenge
KUALA LUMPUR, April 29 (Bernama) -- Understanding how global energy shocks transmit through production and supply chain networks is the key policy challenge for ASEAN economies, particularly in the wake of disruptions linked to the Iran-Strait of Hormuz.
Southeast Asian Futures Initiative Centre (SEAFIC) chairman Tengku Datuk Seri Zafrul Abdul Aziz said recognising these differences is essential to shaping timely, targeted, and effective responses.
"This roundtable (session) aims to move the discussion beyond headline fuel prices. For ASEAN, the real policy challenge is understanding how a shock travels through production and supply chain networks, where it enters, which sectors absorb it, and when it begins to be felt by households and businesses.
"This is where behavioural change and a greater sense of urgency become critical. The impact is neither uniform nor immediate. Each country experiences the shock differently, depending on its economic structure, energy dependence, and policy buffers," he said in a statement following the SEAFIC-ASEAN Roundtable.
SEAFIC convened its first SEAFIC-ASEAN Roundtable titled "Impact of the Global Energy Crisis on ASEAN" today, bringing together senior editors, economists, policy researchers and policy practitioners for a closed-door discussion on the implications of the recent Iran-Hormuz crisis for ASEAN economies.
According to the statement, the session considered how the Strait of Hormuz chokehold on oil and other key commodities could affect ASEAN not only through energy prices, but also through transport costs, insurance premiums, industrial inputs and supply-chain linkages.
These factors could contribute to inflationary pressures on prices, which could eventually lead to disruption and destruction of demand.
The discussion also centred on SEAFIC’s inaugural in-house report on ASEAN supply-chain vulnerability under a Hormuz disruption. The paper argues that border-trade figures alone provide an incomplete picture of vulnerability because some sectors inherit exposure through domestic and global supply chain networks.
For Malaysia, the paper posits that exposure is concentrated rather than economy-wide.
"Petroleum refining is identified as a key transmission channel, while some downstream sectors, including poultry and livestock, appear less exposed at the border but become more relevant once exposure through fertiliser, feed and other upstream inputs is considered," said the statement.
At the ASEAN level, the paper distinguishes among refining-hub exposure, manufacturing-embedded exposure, logistics-driven pass-through and indirect exposure through neighbouring supply chains.
-- BERNAMA
