Welcome to a special edition of On Our Radar, which this week has a special focus on the Iran conflict and the second-order effects which are impacting energy markets across the world.

These summaries are taken from excerpts of our Country Insights and Engage Interactive reporting - if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.

Country Insights Roundup (Iran Conflict Special)

Canada: Opportunity in Iran War

What happened: Rising oil and gas prices following the Iran war and disruption in the Strait of Hormuz have increased global demand for alternative suppliers, positioning Canada’s oil sands and new LNG export capacity as potential beneficiaries. Canadian leaders are already pointing to higher prices and spare pipeline capacity, particularly in the Trans Mountain system, as an opportunity to expand exports.

Why it matters: Energy buyers are increasingly prioritising politically stable suppliers, making Canadian crude and LNG more attractive as Middle East supply becomes less reliable. However, infrastructure constraints, regulatory hurdles, and sensitivities around foreign investment — particularly from China — continue to limit how quickly Canada can scale exports.

What happens next: Key indicators will be the duration of the Hormuz disruption, whether heavy-crude price premiums continue to rise, and whether Ottawa accelerates approvals for new pipelines and LNG export infrastructure. Pressure will grow on Canada’s Major Projects Office and the federal government to fast-track energy projects if high prices persist.

India: Hormuz Crisis Triggers (Limied) Russian Sanctions Relief

What happened: The US Treasury issued a temporary sanctions waiver allowing Indian refineries to import Russian oil that is already loaded on tankers and currently sitting in floating storage, provided it is delivered to India by 5 April 2026. The exemption could release up to roughly 30 million barrels and represents the first meaningful easing of Russian oil sanctions since the Strait of Hormuz crisis triggered global supply disruptions.

Why it matters: The move signals that stabilising global energy markets has become a higher immediate priority for Washington than strict enforcement of Russia sanctions, particularly as the Hormuz disruption pushes oil prices sharply higher. It also redirects some Russian crude away from China back toward India, limiting Beijing’s role as the dominant buyer of discounted Russian oil.

What happens next: If the Strait of Hormuz remains effectively closed, pressure will grow on the US to extend the waiver to additional Russian cargoes that have not yet been loaded and potentially broaden sanctions relief further. At the same time, Washington is likely to pursue parallel measures — including shipping insurance support, possible naval escorts, and market interventions — to restore oil flows and stabilise prices.

Indonesia: Iran War Tests Energy Self-Sufficiency Goal

What happened: Indonesia’s energy minister revealed that the country holds only about 20 days of fuel reserves as the Strait of Hormuz disruption delays shipments and traps some tankers in the Gulf. The disclosure came as the Iran war tightens global energy supplies and pushes oil prices higher.

Why it matters: The figure is far below the typical 90-day benchmark for strategic reserves, exposing Indonesia’s heavy dependence on imported crude and refined fuels. Rising oil prices also threaten to strain the state budget because the government maintains large fuel subsidies while the rupiah remains weak.

What happens next: Jakarta is likely to seek alternative suppliers, including the United States, while exploring politically sensitive options such as Russian crude if the crisis persists. Longer term, pressure will grow on the government to expand fuel storage, diversify suppliers, and accelerate domestic production to reduce vulnerability to external shocks.

Iran: Economic Strain Unlikely to Change Regime Strategy

What happened: Iran entered the current conflict with significant stockpiles of essential goods after lessons from the June 2025 war, allowing basic economic life to continue despite airstrikes and disruptions. Shops, pharmacies and domestic supply chains are largely functioning, although mobility disruptions, wartime pricing and localized infrastructure damage are evident.

Why it matters: Iranian leaders view the conflict through a wartime survival lens and are unlikely to alter their military strategy due to economic pressure alone. The leadership is willing to tolerate significant hardship for the population in pursuit of long-term strategic objectives.

What happens next: Current economic conditions are likely manageable for several weeks, but prolonged conflict could strain medicine supplies, logistics and infrastructure. If pressures intensify, the government is more likely to impose rationing and wartime economic controls than scale back its military posture.

Iraqi Kurdistan: Iraq's Kurds and the Iran War

What happened: Kurdish political factions in Iraqi Kurdistan, particularly the KDP and PUK, have gained greater regional and domestic influence amid the Iran war, supported by closer engagement with the Trump administration and US officials. This rising profile has also made the Kurdistan Region a more visible target for Iran-aligned militias.

Why it matters: The Kurdistan Region’s growing alignment with Washington increases its strategic leverage in Iraqi politics but also heightens security risks, including likely attacks on energy infrastructure and pipelines in the short term. Militias and regional actors increasingly view the KRG as a US-aligned outpost, raising the probability of continued infrastructure strikes during the conflict.

What happens next: Over the coming weeks, sporadic attacks on energy and power infrastructure in Erbil, Dohuk and Sulaymaniyah are likely as the conflict continues. If the regional balance shifts against Iran and its proxies, Kurdish leaders could emerge with stronger leverage in Baghdad and potentially improved relations with neighbouring states after the conflict.

Kazakhstan: Iran War Tests Logistics & Energy Investor Outlook

What happened: Kazakhstan shifted into crisis response mode after the US-Israel war with Iran disrupted regional airspace, transport routes and global energy markets. Authorities are coordinating evacuation flights and monitoring risks to key logistics corridors and energy infrastructure.

Why it matters: Higher oil prices provide a short-term revenue boost for Kazakhstan’s energy sector, particularly companies such as KazMunayGas and KazTransOil. At the same time, investors must weigh these gains against risks to pipelines, transport corridors through Iran and broader financial volatility affecting the tenge.

What happens next: The key variable will be whether the conflict disrupts the North–South transport corridor through Iran or stabilizes quickly. A prolonged conflict could delay trade routes and increase logistics risks, while a political shift in Iran could eventually open new export pathways for Kazakhstan.

United States: Middle East War Could Upend Midterms Outlook

What happened: The US-Israeli war with Iran has already pushed up global oil prices and US gasoline prices as disruptions in the Strait of Hormuz tighten supply. The conflict is unfolding just months before the US midterm elections, creating a potential domestic political issue for the Trump administration.

Why it matters: Energy prices are historically one of the most politically sensitive economic indicators in US elections, particularly when gasoline rises above key thresholds such as $4–$5 per gallon. A prolonged conflict that sustains high prices could reshape the midterm outlook, potentially strengthening Democratic prospects in both the House and Senate.

What happens next: The political impact will largely depend on the duration of the war and the severity of energy market disruptions. If the conflict ends quickly, the political fallout may be limited, but a prolonged Hormuz disruption could push oil and gasoline prices sharply higher and turn energy costs into a central campaign issue.

Vietnam: State Refiner Prioritizes Domestic Demand Amid Middle East Supply Shock

What happened: Vietnam’s state refiner Binh Son Refining and Petrochemical (BSR) asked PetroVietnam and the government to prioritise domestic crude supply and temporarily curb exports as the Strait of Hormuz disruption threatens imported oil flows. Both of Vietnam’s refineries are already operating above design capacity, leaving little buffer if supply chains tighten further.

Why it matters: The request highlights Vietnam’s heavy dependence on imported crude and limited strategic reserves, exposing vulnerabilities in its energy system during global supply shocks. Energy security is now taking precedence over market efficiency in Hanoi’s policy decisions.

What happens next: The government will likely mobilise commercial fuel stocks, smooth prices through fiscal tools and accelerate diversification of crude and LNG supplies. Longer term, expect stronger push for larger strategic reserves, expanded domestic production and more robust supply guarantees for LNG-to-power projects.

Yemen: Why the Houthis Don't Want to (But Probably Will Still) Die for Iran

What happened: Houthi leader Abd al-Malik al-Houthi voiced solidarity with Iran after the US-Israeli strikes but stopped short of committing the group to the conflict. The statement signals caution despite the Houthis’ prominent role attacking Israel and shipping during the Gaza conflict.

Why it matters: The Houthis are balancing their alliance with Iran against domestic pressures, war fatigue and a fragile truce with Saudi Arabia that could bring economic benefits. Even without acting, the possibility of renewed Houthi attacks has already disrupted Red Sea shipping routes.

What happens next: If the Iran war drags on, ideological pressure and regional escalation are likely to pull the Houthis into the conflict. When they do intervene, they are likely to stage a high-profile entry — such as attacks on Israeli targets or international shipping — before reverting to sustained harassment operations.

Stakeholder Influence Tracker

On 5 March, President Javier Milei swore in Juan Bautista Mahiques as his new justice minister, replacing Mariano Cuneo Libarona. The appointment highlights the shifting power dynamics within the administration in favor of his sister and Argentina's chief of staff, Karina Milei.

Mahiques’s appointment is a comprehensive win for Karina over top political advisor Santiago Caputo. Caputo had pushed for his associate, Sebastian Amerio, to be promoted from deputy justice minister only to see him sacked instead.

In this case, Mahiques, as a longtime court insider, may offer some leverage on keeping control of corruption investigations such as the Libra Crypto scam.

Nonetheless, this is another big blow for Caputo, who has been losing ground against Karina since the October midterms.

While Javier Milei had earlier referred to the three as an ‘iron triangle’, Caputo seems increasingly restricted to offering guidance on PR issues.

Karina’s growing influence though, is good news for investors. She is more rational than Caputo, who tends to pick confrontation and bluster over talk.

Find Out More

These summaries are taken from excerpts of our Country Insights and Engage Interactive reporting - if you would like to receive our full reporting and analysis from our team of regional experts and former ambassadors on any of these developments, please click here for more information.