Iraq News Now

The blasts detonated far from the bustling megacities of

Asia, but the attack this week on two tankers in the strategic Strait of Hormuz

hits at the heart of the region’s oil import-dependent economies.

While the violence only directly jolted two countries in the

region — one of the targeted ships was operated by a Tokyo-based company, a

nearby South Korean-operated vessel helped rescue sailors — it will unnerve

major economies throughout Asia.

Officials, analysts and media commentators on Friday

hammered home the importance of the Strait of Hormuz for Asia, calling it a

crucial lifeline, and there was deep interest in more details about the

still-sketchy attack and what the United States and Iran would do in the

aftermath.

In the end, whether Asia shrugs it off, as some analysts

predict, or its economies shudder as a result, the attack highlights the

widespread worries over an extreme reliance on a single strip of water for the

oil that fuels much of the region’s shared progress.

Here is a look at how Asia is handling rising tensions in a

faraway but economically crucial area, compiled by AP reporters from around the

world:

WHY ASIA WORRIES

The oil, of course.

Japan, South Korea and China don’t have enough of it; the

Middle East does, and much of it flows through the narrow Strait of Hormuz.

This could make Asia vulnerable to supply disruptions from US-Iran

tensions or violence in the strait.

The attack comes months after Iran threatened to shut down

the strait to retaliate against US economic sanctions, which tightened in April

when the Trump administration decided to end sanctions exemptions for the five

biggest importers of Iranian oil, which included China and US allies South

Korea and Japan.

Japan is the world’s fourth-largest consumer of oil — after

the United States, China and India — and relies on the Middle East for 80% of

its crude oil supply. The 2011 Fukushima nuclear disaster led to a dramatic

reduction in Japanese nuclear power generation and increased imports of natural

gas, crude oil, fuel oil and coal.

In an effort to comply with Washington, Japan says it no

longer imports oil from Iran. Officials also say Japanese oil companies are

abiding by the embargo because they don’t want to be sanctioned. But Japan

still gets oil from other Middle East nations using the Strait of Hormuz for

transport.

South Korea, the world’s fifth largest importer of crude

oil, also depends on the Middle East for the vast majority of its supplies.

Last month, South Korea halted its Iranian oil imports as

its waivers from US sanctions on Tehran expired, and it has reportedly tried

to increase oil imports from other countries such as Qatar and the United

States.

China, the world’s largest importer of Iranian oil,

“understands its growth model is vulnerable to a lack of energy sovereignty,”

according to market analyst Kyle Rodda of IG, an online trading provider, and

has been working over the last several years to diversify its suppliers. That

includes looking to Southeast Asia and, increasingly, some oil-producing

nations in Africa.

THE GEOGRAPHY AND THE POLITICS

Asia and the Middle East are linked by a flow of oil, much

of it coming by sea and dependent on the Strait of Hormuz, which is the passage

between the Arabian Gulf and the Gulf of Oman.

Iran threatened to close the strait in April. It also

appears poised to break a 2015 nuclear deal with world powers, an accord that US

President Donald Trump withdrew from last year. The deal saw Tehran agree to

limit its enrichment of uranium in exchange for the lifting of crippling

sanctions.

For both Japan and South Korea, there is extreme political

unease to go along with the economic worries stirred by the violence in the

strait.

Both nations want to nurture their relationship with

Washington, a major trading partner and military protector. But they also need

to keep their economies humming, which requires an easing of tension between

Washington and Tehran.

Japan’s conservative prime minister, Shinzo Abe, was in

Tehran, looking to do just that, when the attack happened.

His limitations in settling the simmering animosity,

however, were highlighted by both the timing of the attack and a comment by

Iranian Supreme Leader Ayatollah Ali Khamenei, who told Abe that he had nothing

to say to Trump.

In Japan, the world’s third largest economy, the tanker

attack was front-page news.

The Nikkei newspaper, Japan’s major business daily, said

that if mines are planted in the Strait of Hormuz, “oil trade will be paralyzed.”

The Tokyo Shimbun newspaper called the Strait of Hormuz Japan’s “lifeline.”

Although the Japanese economy and industry minister has said

there will be no immediate effect on stable energy supplies, the Tokyo Shimbun

noted “a possibility that Japanese people’s lives will be affected.”

South Korea, worried about Middle East instability, has

worked to diversify its crude sources since the energy crises of the 1970s and

1980s.

THE FUTURE

Analysts said it’s highly unlikely that Iran would follow

through on its threat to close the strait. That’s because a closure could also

disrupt Iran’s exports to China, which has been working with Russia to build

pipelines and other infrastructure that would transport oil and gas into China.

For Japan, the attack in the Strait of Hormuz does not

represent an imminent threat to Tokyo’s oil supply, said Paul Sheldon, chief

geopolitical adviser at S&P Global Platts Analytics.

“Our sense is that it’s not a crisis yet,” he said of the

tensions.

Seoul, meanwhile, will likely be able to withstand a modest

jump in oil prices unless there’s a full-blown military confrontation, Seo

Sang-young, an analyst from Seoul-based Kiwoom Securities, said.

“The rise in crude prices could hurt areas like the

airlines, chemicals and shipping, but it could also actually benefit some

businesses, such as energy companies (including refineries) that produce and

export fuel products like gasoline,” said Seo, pointing to the diversity of

South Korea’s industrial lineup. South Korea’s shipbuilding industry could also

benefit as the rise in oil prices could further boost the growing demand for

liquefied natural gas, or LNG, which means more orders for giant tankers that

transport such gas.