This war is not being fought in the Global South – but its deepest economic damage will be felt there. In Assam, India, residents lined up for hours on March 13 to purchase liquefied petroleum gas. In Dhaka, filling stations were shut on Eid, with queues stretching for hours. These are not abstractions. They are the lived experience of a conflict that began thousands of miles away and that the people absorbing its costs played no part in starting.The mechanism is structural. The Strait of Hormuz, through which approximately 20% of global oil and a significant share of LNG normally flows, has been effectively closed to commercial traffic since the conflict began. Brent crude, which traded near USD 70 per barrel in late February, has since climbed above USD 110 – a gain of more than 55% in under four weeks, with oil prices touching USD 114 per barrel at their peak this week.The International Energy Agency has described the situation as the “greatest global energy security challenge in history”. For the import-dependent economies of the Global South, many of which entered 2026 already managing debt burdens, elevated inflation and weakened currencies, this is not disruption but compounding crisis.Energy price shocks and economic strainThe most immediate transmission channel is energy pricing. Oil-importing nations across South Asia, Southeast Asia and sub-Saharan Africa face structurally higher costs for every barrel purchased, translating rapidly into higher electricity, transport and production costs across economies that entered 2026 with limited fiscal room.The Asian Development Bank has identified the Philippines, Pakistan and Sri Lanka as the most vulnerable Asian economies, noting rapid transmission into inflation and currency pressure. Pakistan has raised state-controlled energy prices by 20%, according to development economist Mushfiq Mobarak of Yale University.Bangladesh is among the most acutely exposed economies in the world. Natural gas accounts for approximately half of the country’s electricity supply and LNG imports – introduced in 2018 – have become indispensable as domestic reserves plateau. The crisis deepened sharply on March 18-19 when Iranian missiles struck Qatar’s Ras Laffan Industrial City, the world’s largest LNG export facility, causing extensive damage and forcing QatarEnergy to declare force majeure for up to five years.Wood Mackenzie has identified Bangladesh as among the most vulnerable economies globally, with no short-term substitution pathway at current prices. The effect is already visible in everyday prices. As of March 22, most filling stations in Dhaka were closed, with long queues persisting through Eid. Bangladesh’s inflation, already at 9.13% in February, is now being driven further by transport costs that have nearly doubled – rice shipments from northern districts now cost Tk 22,000 per consignment, up from Tk 14,000 a week ago.People wait in a long queue at a petrol pump in Dhaka, Bangladesh, on March 6, 2026. Bangladesh has asked citizens to minimise ‘unnecessary travels’. Photo: PTI.India’s exposure runs deeper than the Assam fuel queues suggest. The country imports approximately 87% of its crude oil, with roughly half sourced from countries in the Gulf. Since the Ras Laffan attack, India has begun rationing natural gas for manufacturers, with fertiliser plants capped at 70% of demand – a constraint that will transmit into food prices in the months ahead.Indian refineries have scrambled toward costlier US and West African alternatives, driving domestic fuel prices higher despite government pressure. The rupee has depreciated under a widening current account deficit and capital outflows. And India’s more than nine million Gulf migrant workers represent the world’s largest single remittance corridor, now facing serious downward pressure as Gulf economies contract.Trade and logistics disruptionsBeyond energy, the conflict has reshuffled shipping logistics. Vessels rerouting via the Cape of Good Hope add 3,500 nautical miles and up to 14 days to voyages, raising freight rates and insurance premiums across supply chains. For the electronics and semiconductor sectors in the Philippines, Malaysia and Vietnam – which depend on both air cargo and maritime shipping – the disruptions translate directly into higher production costs and compressed margins.The disruption reaches further than shipping routes. Three-quarters of Gulf residents are migrant workers from South and Southeast Asia and Africa. As Gulf economies contract, remittance outflows to Bangladesh, the Philippines and others face serious downward risk on top of the energy and trade pressures already operating.Food security and agricultural impactsAmong the most consequential and least visible transmission channels is the disruption of global fertiliser supply. The Gulf region is a major supplier of sulfur, a primary input for fertiliser production. The Fertiliser Institute has noted that nearly 50% of global urea and sulfur exports transit the Strait of Hormuz. Carnegie Endowment analysts describe this fertiliser bottleneck as potentially a longer-lasting economic wound than the oil price spike itself: reduced availability during planting translates into smaller harvests months later, driving food price increases that fall disproportionately on the world’s poorest households.The UN World Food Programme warns that if the conflict continues through June with oil above USD 100 per barrel, an additional 45 million people could be pushed into acute hunger – bringing the global total to 363 million, the highest on record. Asia faces the steepest rise, with an estimated 9.1 million additional people at risk. For economies that import both food and fuel – a description that fits much of sub-Saharan Africa and parts of South Asia – the simultaneous increase represents a severe squeeze on household purchasing power.Financial market vulnerabilitiesFinancial markets across the Global South entered this crisis with limited buffers. Sovereign debt remains elevated from COVID-era borrowing, currency reserves have been drawn down and interest rates were only beginning to ease. The conflict has interrupted that fragile trajectory.The Overseas Development Institute has identified a structural policymaking trap: as currencies weaken and fuel prices rise, central banks may feel compelled to raise interest rates even as their domestic economies slow. In South Africa, Turkey and several Latin American economies, this dynamic is already visible, tightening financial conditions that compress growth at precisely the moment when these economies can least absorb it.On March 19, the World Trade Organisation warned that if oil and gas prices remain elevated for the rest of 2026, global GDP growth could fall by 0.3 percent – a forecast that falls disproportionately on economies with the least fiscal room to respond.Strategic opportunities and adaptive responsesThe crisis has not been uniformly negative for the Global South. Oil-exporting economies – Nigeria and Angola in Africa, Colombia and Ecuador in Latin America – are receiving a revenue windfall, with a strategic opportunity to invest in diversification provided they manage inflationary pressures at home. More broadly, the conflict has accelerated energy diversification conversations across multiple regions: South and Southeast Asian governments are in active discussions with US, Australian and East African suppliers about long-term arrangements, while the price environment has made renewables substantially more competitive.Solar and wind infrastructure does not transit maritime chokepoints and India, with its large solar base, is positioned to leverage this shift. India has also accelerated negotiations with alternative crude suppliers, part of a broader structural shift in energy trade geography that was already underway before the conflict began.Resilience as a strategic imperativeThe Iran conflict has made visible – with unusual clarity – the asymmetric vulnerability of Global South economies to disruptions that originate far from their borders. These economies are exposed through multiple simultaneous channels: energy import costs, fertiliser and food supply, shipping logistics, remittance flows and financial market conditions. In each of these dimensions, the shock has been transmitted rapidly and with limited capacity for local policy to fully absorb it.Yet the crisis also carries within it an argument for the investments that could reduce that vulnerability over time. Energy diversification, supply chain redundancy and sovereign financial buffers are the instruments that determine how severely the next distant conflict reverberates in Lagos, Dhaka, or Manila. Countries that use this shock’s urgency to accelerate those investments will be better placed when the next one comes.The Global South cannot control distant wars. But it can decide whether the next one finds it this exposed.