India and other Asia-Pacific economies may face rising credit stress if the ongoing Gulf conflict continues, as surging energy prices and supply chain disruptions ripple through global markets, according to a Moody’s Ratings report released on Friday.
The report highlighted that import-dependent countries could experience tighter access to fuel, food, and industrial inputs. Disruptions in fertilizer supply chains could reduce crop yields, drive up food prices, and raise affordability risks.
In 2024, India sourced 43% of its petroleum and petroleum products from GCC countries, Iraq, and Iran, compared with 84% for Japan, 67% for Korea, and 42% for China.
“Producers with significant assets in Japan, Korea, India, and China are most exposed due to their heavy reliance on Middle Eastern oil and the use of naphtha, an oil-derived product, as the main feedstock for Asia’s steam crackers,” Moody’s said.
The report also warned that a prolonged conflict could push Brent crude prices to around $135 per barrel in the second quarter, keeping prices above $100 for months before easing to about $90 by the end of 2026. Moody’s identified three main channels through which global credit risk could transmit: energy markets and supply chains, tighter macro-financial conditions, and broader geopolitical disruptions.
