Already a subscriber? Make sure to log into your account before viewing this content. You can access your account by hitting the “login” button on the top right corner. Still unable to see the content after signing in? Make sure your card on file is up-to-date.

A top Japanese official has warned that the global oil supply crunch caused by the Iran war and the closure of the Strait of Hormuz is having an “enormous impact” across the Indo-Pacific.

Some shit you should know before you dig in: If you’re unaware, the Strait of Hormuz, which normally handles about 20% of the world’s oil and liquefied natural gas every day, has been effectively shut down since Iran responded to the US-Israeli attack on Feb 28 by restricting commercial shipping through the waterway. The US has imposed its own naval blockade on Iranian ports. Together, those moves have ripped more than 14 million barrels of oil and 110 billion cubic meters of gas out of the global market each day. About 80% of the oil that normally moves through the strait is destined for Asia, which means the pain has hit Asian economies harder than just about anywhere else. The Asian Development Bank has already slashed its growth forecast for developing Asia and the Pacific to 4.7% this year and 4.8% in 2027 (down from 5.1% for both years before the war) and bumped its inflation forecast up to 5.2%. Tokyo gets 95% of its oil from the Middle East, and on Friday it pulled 36 million barrels out of its emergency reserves, marking the second drawdown since the conflict began.

What’s going on now: Japanese Prime Minister Sanae Takaichi made the comments Monday during a three-day visit to Australia, where she met with Australian Prime Minister Anthony Albanese and the two countries signed a string of agreements to boost cooperation on energy, critical minerals, the economy, and defense. “The effective closure of the Strait of Hormuz has been inflicting enormous impact on the Indo-Pacific. We affirmed that Japan and Australia will closely communicate with each other in responding with a sense of urgency.”

Australia, which provides about a third of Japan’s energy supplies, is its biggest source of liquefied natural gas. Albanese echoed Takaichi’s concerns, saying, “Like Japan, we are very concerned by disruptions to the supply of liquid fuels and refined petroleum products.”

The energy crisis has set off a much broader scramble across Asia, but China has held up better than most, sitting on big reserves, pulling energy from a mix of suppliers, and clamping down on fuel and fertilizer exports to keep more product at home. Indonesia has ordered its energy companies to prioritize domestic supply, frozen LNG cargoes that aren’t already locked into contracts, and lined up a 150-million-barrel oil purchase from Russia before the year is out.

The energy crunch has also lit a fire under North American producers. Last month was the first time since 1944 that the US sold more crude abroad than it bought from foreign suppliers. Daily exports have roughly doubled since late March, averaging a record 6.4 million barrels in the seven days through April 24. Canadian oil exports out of Vancouver jumped 60% in April compared to February, according to shipping data firm Vortexa.