Asia-Pacific (APAC) commodity issuers are expected to experience varying credit impacts if the ongoing conflict involving Iran continues to disrupt energy supply and shipping routes in the Gulf region, according to Fitch Ratings. While upstream producers stand to gain from increased prices, downstream sectors that are heavily reliant on energy and feedstock could face margin pressures due to rising costs. The most significant risks include higher input prices affecting chemicals, fertilizers, and certain metals, as well as potential shipping disruptions that might exacerbate working capital issues due to delays and stranded goods. Although our main concern is a prolonged shutdown of the Strait of Hormuz, we anticipate only short-lived disruptions.
Upstream oil and gas producers are likely to benefit initially as buyers seek alternative cargoes. Countries such as Australia, Malaysia, and Indonesia are expected to see increased demand, thereby boosting prices and cash flow for companies like Santos (BBB/Stable), Oil and Natural Gas Corporation (BBB-/Stable), and PT Pertamina Hulu Energi (BBB/Stable). In contrast, downstream refiners, including Indian oil companies such as Indian Oil Corporation (BBB-/Stable), Bharat Petroleum Corporation (BBB-/Stable), and Hindustan Petroleum Corporation (BBB-/Stable), may face challenges with margins and working capital if input prices rise faster than they can be passed on to customers. This risk is particularly pronounced where fuel prices are regulated or where crude supply disruptions lead to production cuts once inventories run low. PT Pertamina (Persero) (BBB/Stable) might experience increased government compensation receivables for selling certain grades of gasoline and diesel below market prices, putting pressure on cash flow. Refiners with sufficient domestic crude supply, such as Vietnam’s Binh Son (BB+/Stable), are less vulnerable.
Rising gas prices could also boost thermal coal demand in East Asia if buyers switch from gas to coal, particularly in Japan, South Korea, and Taiwan. Liquefied natural gas prices are expected to rise if Qatar’s Ras Laffan facility is closed, as it accounts for approximately 20% of the global supply. In the short term, this development would primarily benefit Australian exporters due to their role in supplying high-energy thermal coal to East Asia, with Indonesian exporters also seeing support. Newcastle coal futures had already increased by about 9% to USD129 a ton as of March 3, 2026.
Disruptions to Gulf supply would also influence the metals market, albeit with varied impacts on producers. While stronger prices could be counterbalanced by higher power and logistics costs, the Middle East’s contribution to global aluminum production stands at around 8%-9%. Chinese producers, such as Aluminum Corporation of China (BBB+/Stable) and China Hongqiao Group (BB+/Stable), are expected to benefit more from tighter global supply and elevated prices due to stable power availability and tariffs. In contrast, higher power prices in Japan and South Korea could pressure margins. Copper faces mixed pressures, with supply-chain disruptions supporting short-term prices, but increased costs for shipping from South America and Africa narrowing margins, alongside rising energy prices. High power prices could also dampen global growth, reducing copper demand and pushing prices lower. Meanwhile, gold miners are likely to benefit as geopolitical risks increase demand.
The implications for steel producers are mostly negative, as logistics bottlenecks for ore imports and rising energy prices increase unit costs. Additionally, exports to the Middle East, which accounted for about 15% of Chinese steel exports in 2025, could decline.
The Gulf region holds significant importance in the global fertilizer trade. An extended conflict could have a mixed impact on fertilizer manufacturers, with stronger selling prices potentially offset by sharp increases in natural gas input costs.
Chemicals producers face significant risks from a prolonged conflict, as higher oil and gas prices would raise naphtha feedstock costs and compress margins. This poses a particular risk for issuers with limited rating headroom, such as PTT Global Chemical Public Company (BBB-/Stable).
