Oil Shock Pushes Asia Toward Demand Destruction as Supplies Tighten

JPMorgan’s oil analysts warn Asia is entering a demand-destructive phase as energy prices spike and supply tightens, with jet fuel, gasoline, and diesel demand dropping sharply across the region. Refineries face feedstock disruptions (notably Middle East naphtha), prompting production cuts and force majeure in petrochemicals from Japan to Southeast Asia. Governments are rationing fuel use via shorter holidays and four-day workweeks; airlines are layering surcharges or cutting routes as jet fuel nears $200/bbl. The shortages threaten broader economic growth and could spill over globally if tensions persist around the Strait of Hormuz, with the episode possibly having a long tail even if peace returns.