Middle East Conflict: Implications for South Asia
By Ioan Voicu, former Romanian ambassador to Thailand
This brief chronicle aims to familiarize Gavroche readers with the article published by the Secretariat of the Economic and Social Commission for Asia and the Pacific (ESCAP) on April 1, 2026, titled “Present conflict in the Middle East: Risks and opportunities for South Asia“.
Although the original source is a technical document, its content deserves to be widely disseminated among a broader audience. The article offers an in-depth analysis of the consequences of the current conflict in the Middle East on the economies of South Asia. It is an interpretation developed by ESCAP experts, rather than an official position binding the member states.
Geopolitical tensions to energy shocks
The article highlights the escalation of geopolitical tensions in the Middle East, particularly the conflict involving the Islamic Republic of Iran. These tensions exert significant pressure on global systems, especially in terms of peace, trade, and energy markets.
The Middle East remains a crucial region for global oil and gas supply. Any disruption there has cascading effects on a global scale. The sharp increase in the price of Brent crude oil, which exceeded $100 per barrel and reached around $120 in early March 2026, perfectly illustrates this volatility. This rise is mainly due to concerns about a possible disruption of the Strait of Hormuz, through which around a fifth of the world’s oil trade passes.
Unique vulnerability of South Asia
Countries dependent on energy imports, especially developing economies, are the most exposed. The rise in energy prices increases transportation costs, accentuates inflationary pressures, and weakens macroeconomic balances.
South Asian countries are among the most vulnerable due to their strong dependence on imported fossil fuels from the Middle East. Pakistan and Bangladesh import a significant portion of their liquefied natural gas from Qatar and the United Arab Emirates, while India gets nearly half of its crude oil imports from this region, with much of it passing through the Strait of Hormuz.
Past episodes of oil price volatility have already triggered economic crises in the region, such as in Sri Lanka. The current increases could lead to similar effects: deterioration of the balance of payments, weakening of national currencies, increased inflation, and significant budgetary pressures. These repercussions affect all sectors: transportation, industry, agriculture, and services. Energy dependence emerges as a systemic vulnerability factor that can hinder development.
A crisis that can also become an opportunity
The article does not limit itself to an alarmist observation. It argues that this crisis can be an opportunity for structural transformation. It emphasizes the urgency of reducing dependence on imported fossil fuels and enhancing long-term energy security.
In this perspective, the transition to renewable energies is presented as a “triple dividend strategy”:
– Strengthening energy security by reducing import dependence and limiting exposure to international market volatility. South Asia has significant potential in solar, hydro, and wind energy.
– Supporting economic growth through job creation, attracting private capital, and developing local industries in solar technologies, energy storage, and modernizing electrical networks.
– Improving public health and protecting the environment by reducing air pollution, a major problem in many cities in the region, while facilitating the fulfillment of climate commitments.
Real but insufficient progress
Some advances have already been made: several countries have invested in solar energy, improved their energy efficiency, and adopted renewable-friendly policies. Regional cooperation is also intensifying, especially through cross-border electricity exchanges between India, Nepal, Bhutan, and Bangladesh.
However, these efforts remain uneven and insufficient. Major obstacles persist in terms of financing, infrastructure, and regulation. Electrical networks are not always prepared for the massive integration of renewable energies, and investment risks continue to hinder the private sector.
Conclusion
The authors stress the need to strengthen regional cooperation: developing electrical interconnections, sharing technical knowledge, and harmonizing regulatory frameworks. They highlight ESCAP’s role as a neutral platform for political dialogue, capacity building, and technical assistance.
Ultimately, in a global context marked by uncertainty, energy security can no longer rely solely on fossil fuels. For South Asian countries, the transition to green energy represents both a strategic necessity and a genuine opportunity for sustainable development.
This analysis highlights a dual reality: the seriousness of the risks associated with current geopolitical tensions and the transformation potential they offer to vulnerable economies.
Ioan Voicu
