Energy shockwaves: Asia first in the line of fire

We have revised our forecasts to incorporate higher energy prices, assuming Brent averages close to US$100 per barrel in Q2 before easing to around US$80 by year-end. Given Asia’s heavy reliance on imported energy – particularly flows through the Strait of Hormuz – the region is more exposed than others, and our 2026 GDP downgrades are larger across much of Asia than elsewhere (with the exception of the Gulf economies). While inflation will rise, most economies start from below-target levels, so we have removed expected rate cuts in several markets and now see a more hawkish policy path in parts of the region.