ASB analysis shows more than a quarter of New Zealand's economy has high or very high exposure to disruption from the Strait of Hormuz closure, with effects spreading from fuel and freight into fertiliser, plastics, and food manufacturing.
The closure of the Strait of Hormuz is creating ripple effects well beyond the petrol pump. New analysis from ASB estimates that more than a quarter of New Zealand's economy has high or very high direct or indirect exposure to disruption from the waterway's continued closure, with agricultural, manufacturing, construction and transport industries most acutely affected.
The bank's analysis found that roughly 25 percent of the economy has high or very high exposure to at least two of the key disruption channels: fuel, fertiliser, and plastics. ASB expected the initial inflation impulse to show up in fuel, food, freight, plastic products, and goods with high transport or packaging costs.
How disruption flows through the economy
The Strait of Hormuz is one of the world's most critical oil chokepoints. While direct fuel price rises are the most visible impact — retail diesel prices have already moved significantly since the Middle East conflict began — the blockage also affects natural gas, fertiliser and petrochemicals that New Zealand industries depend on.
ASB senior economist Kim Mundy said the broader story is how the entire cost shock, including fertiliser and petrochemicals, spreads through supply chains, lifting the cost of manufactured goods, packaging, freight and farm inputs, and the flow-on effects of that to consumer spending.
The sectors most exposed by direct fuel cost rises include transport and warehousing, construction (particularly non-residential and civil engineering), primary industries and mining. Most of these businesses are exposed to diesel rather than petrol, and diesel prices have been particularly volatile since the conflict began.
Transport and warehousing is the most exposed sector to direct fuel cost rises, followed by construction, primary industries and mining. The report noted most businesses in these sectors are exposed to diesel rather than petrol.
What this means for households
For everyday New Zealanders, the exposure is two-sided. Consumer-facing sectors such as retail, hospitality, arts and recreation face softer demand as higher fuel costs reduce household purchasing power — a classic indirect effect of an energy supply shock. At the same time, the cost of goods with high transport or packaging intensity rises as producers pass on higher input costs.
Fertiliser is one of the more significant indirect exposures for New Zealand. The country imports a substantial share of its fertiliser requirements, and any disruption to those supply chains eventually flows back to farm input costs and, over time, to food prices at the checkout.
The conflict outlook remains highly uncertain with no clear path toward any agreement to reopen the Strait. ASB said it was prudent for businesses to understand their exposures, though the full economic effects would unfold over months rather than days.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.