ASEAN Leaders Agree on Measures to Mitigate Economic Impact of Iran War

The Economic Fallout of the Iran War

Southeast Asian leaders have agreed on measures aimed at reducing the impact of the Iran war on their economies, but conceded that the initiatives will take considerable time to come into effect.

ASEAN Summit Agreements

On Friday, leaders gathered in the Philippines for a summit of the Association of Southeast Asian Nations (ASEAN), with the closure of the Strait of Hormuz dominating the agenda.

• Members agreed to a regional fuel-sharing framework in a bid to ease the economic strain caused by the more than two-month closure of the strategic waterway.
• Leaders also agreed to develop a regional power grid and fuel stockpile, while reducing their dependence on energy imports from the Middle East.

Economic Impact and Future Outlook

ASEAN currently imports more than half of its crude oil and 17 percent of its natural gas from the Middle East, according to the bloc’s Centre for Energy.

Philippine President Ferdinand Marcos Jr welcomed the outcome, but conceded that the practical arrangements still needed to be clarified.

“How is the sharing? Who gets what? How do you pay for it? Do you pay for it? Is it an exchange? … We haven’t done it before,” he said.

Marcos warned that the economic consequences of the war in Iran would persist for the foreseeable future.

“A few weeks worth of disruptions will take years to be corrected,” he said.

Regional Response and Future Challenges

The initiative was one of a handful of measures adopted at the summit.

Al Jazeera’s Jamela Alindogan reported that the overarching theme was one of unity, with ASEAN countries pledging to continue coordinating their response while safeguarding their national interests.

Alindogan added that the bloc was still recovering from tariffs imposed by US President Donald Trump last year and was considering how to hedge its relationships with other countries to shield itself from future crises.