Global Energy Crisis: Restaurants Struggle, Fuel Rationing & Economic Fallout

The escalating conflict in the Middle East, specifically the US-Israeli war on Iran, is sending economic tremors far beyond the region, disrupting supply chains and triggering price increases across multiple sectors. From restaurant menus shrinking in India to fuel rationing in Sri Lanka and anxieties over tourism in Thailand, the effects are being felt globally. The crisis is particularly acute for countries heavily reliant on Middle Eastern energy supplies and trade routes, but the ripple effects are increasingly widespread.

Restaurant Sector Under Pressure in India

Sagar Daryani, president of the National Restaurant Association of India (NRAI), representing half a million restaurants across the country, described the situation as precarious. “It’s a thin line between fighting today to survive tomorrow,” Daryani said, noting that businesses are already cutting hours, reducing menu offerings and seeking temporary solutions to stay afloat. According to the Guardian, approximately one-third of restaurants are significantly affected by the disruptions. The immediate impact is being seen in menu adjustments, with restaurants removing gas-intensive dishes to conserve fuel.

The crisis highlights the vulnerability of India’s restaurant industry to fluctuations in energy prices. Daryani, who is also CEO & Co-Founder of Wow! Momo Foods Pvt. Ltd., according to the NRAI website, is leading efforts to navigate the challenges. The situation is compounded by broader economic concerns, including a recent significant drop in the value of the Indian rupee, driven by fears of soaring oil and gas prices and their impact on the country’s import bill. India imports nearly 90% of its oil and half its gas, much of it from the Gulf region.

Supply Chain Disruptions and Rising Fuel Costs

The primary driver of these economic shocks is the disruption to vital shipping lanes, particularly the Strait of Hormuz, following retaliatory actions by Iran. The International Energy Agency has characterized the situation as the largest supply disruption in the history of the global oil market. This has led to a surge in fuel prices, impacting not only transportation but also industries reliant on oil and gas as raw materials or energy sources.

In Kolkata, restaurants are facing a critical shortage of commercial LPG (liquefied petroleum gas), forcing some to temporarily close and others to drastically curtail operations. The Times of India reports that major restaurant chains like Arsalan are considering switching to coal-fired ovens, while Wow! Momo is exploring shifting production to a facility powered by LNG. Both the National Restaurant Association of India (NRAI) and the Hotel and Restaurant Association of Eastern India (HRAEI) have appealed to the petroleum minister for intervention.

Tourism and Travel Sector Hit Hard

Beyond the immediate impact on energy and food, the conflict is also affecting the tourism sector. In Thailand, a popular tourist destination, inquiries for trekking tours have plummeted, and pre-booked customers are cancelling trips due to security concerns and fears about potential travel disruptions. Approximately 1,000 Thailand-bound flights have already been cancelled, according to Aeronautical Radio of Thailand. The tourism ministry predicts potential losses of £934.4 million if the airspace closure extends for eight weeks.

Sri Lanka has reintroduced a QR code-based fuel rationing system, reminiscent of the measures implemented during the 2022 economic crisis. Long queues are forming at fuel stations, and citizens are facing restrictions on fuel allowances. The situation is particularly challenging for those reliant on fuel for their livelihoods, such as autorickshaw drivers.

Security Concerns in Europe

The conflict is also manifesting in security concerns within Europe. Recent attacks on a US embassy in Norway and synagogues in Belgium and the Netherlands have raised fears of retaliatory strikes linked to the Iranian regime. Several European countries have increased security measures and are investigating potential connections to Iran.

Ripple Effects Across Asia and Beyond

The disruptions extend beyond Asia. South Africa is experiencing a surge in jet fuel prices, prompting airlines like Fly Safair and Airlink to introduce fuel surcharges and increase ticket prices. The country’s central bank is revising its economic projections in light of the escalating energy costs. Even seemingly unrelated sectors are being affected. in Japan, snack maker Yamayoshi Seika has halted production of its popular crisps due to difficulties securing heavy oil for its cooking processes.

The crisis is also impacting global fertilizer supplies, as a significant portion of shipments transit through the Strait of Hormuz. This poses a threat to agricultural production in Asia, where many countries are heavily reliant on fertilizer imports. The Food and Agriculture Organization (FAO) estimates that global fertilizer prices could rise by 15-20% in the first half of 2026 if the crisis persists.

Winners and Losers in the Energy Market

While many countries are grappling with the negative consequences of the conflict, some net energy exporters, such as Norway and Canada, could potentially benefit from higher oil prices. The US is also exploring options to increase oil production, including easing sanctions on Venezuela. However, Russia is emerging as a significant economic beneficiary, with increased revenue from fossil fuel sales, despite ongoing sanctions. Moscow’s “shadow fleet” of tankers is also playing a role in circumventing sanctions and maintaining oil exports.

Looking Ahead: Uncertainty and Adaptation

The duration and ultimate outcome of the conflict remain uncertain, making it difficult to predict the long-term economic consequences. Governments are implementing emergency measures to mitigate the impact, but the situation is likely to remain volatile in the near term. Businesses are adapting by cutting costs, adjusting menus, and seeking alternative supply sources. The crisis underscores the interconnectedness of the global economy and the vulnerability of supply chains to geopolitical shocks. The coming weeks will be critical in assessing the full extent of the damage and determining the path forward. Monitoring oil prices, shipping routes through the Strait of Hormuz, and the responses of key governments will be essential for understanding the evolving economic landscape.