Asia's $116 oil squeeze: who pays, who's shielded

<p><em>Special Reporting from LSN News, adapted from today's Asia Money Map episode. <a href="https://youtu.be/Jfvv1z199nY" target="_blank" rel="noopener">Watch the video on YouTube.</a></em></p>

<p>Brent crude settled at $116.72 a barrel on Friday, 23 October, its highest close since late April, Reuters reports. For Asia's big oil importers, that price is not just a headline. It works like a tax, and the region's central banks are now fighting a shock they did not start.</p>

<h2>Why oil is surging</h2>

<p>Brent rose more than three dollars on Friday and finished the week up 6%, according to Reuters. The Associated Press notes it has surged from less than $97 at the start of October. West Texas Intermediate closed at $103.27. Forecasters are being overtaken: ING said its call for Brent to average $80 this quarter now appears unattainable, the Wall Street Journal reports.</p>

<p>Reuters reports that Houthi attacks across Saudi Arabia, including on energy infrastructure, stoked fears of fresh supply disruption, and that Saudi Aramco ordered the evacuation of its headquarters in Dhahran on Thursday. An oil spill was also detected off the coast of the United Arab Emirates. On Thursday, President Donald Trump said the United States may strike Iran again: "we may do it a little bit further." The US-Israeli war on Iran began in late February, and a final peace deal remains stuck, largely over navigation in the Strait of Hormuz. Andrew Lipow of Lipow Oil Associates told Reuters that more oil is moving out of Hormuz, but "that could change at any minute."</p>

<h2>Who is paying: Manila, Mumbai and Jakarta</h2>

<p>On Thursday, 22 October, the Bangko Sentral ng Pilipinas raised its key rate by 50 basis points to 5.5%, its fourth straight hike. All 27 economists polled by Reuters had expected only a quarter point. Inflation hit 7.2% in September. Governor Eli Remolona said the bank acted because it expects inflation to accelerate further, due to oil prices, transport fares and the potential effects of El Niño on food prices, and warned inflation could reach as high as 8% next year. Even so, the peso closed at a record low of 63.52 to the dollar, its 30th record low this year, GMA News reports. According to Reuters, the currency has plunged nearly 10% since the war began.</p>

<p>The Reserve Bank of India raised its repo rate by 25 basis points to 5.5% on 7 October and opened a special dollar window for the state oil companies Indian Oil, Bharat Petroleum and Hindustan Petroleum. India's foreign exchange reserves fell by $5.01 billion in the week to 16 October, to about $721 billion. The rupee closed Friday at 94.94 per dollar, Business Standard reports, after a short-lived rally helped by inflows tied to the Jio Platforms share sale.</p>

<p>Indonesia is feeling it too. Reuters reports the rupiah slipped to 18,080 per dollar on Friday, its weakest since late July, even as Jakarta stocks extended a four-session rebound. A Reuters poll of currency investors at the start of October named the rupee, the peso and the Thai baht among the most vulnerable in the region, with Thailand's policy rate at just 1%.</p>

<h2>Who is shielded</h2>

<p>Not everyone is losing. South Korea's won traded near a two-year high on Friday, at about 1,326 per dollar, Reuters reports, and the same Reuters poll linked the won's strength to booming AI chip exports. It also found Malaysia's ringgit largely resilient, because Malaysia is a net energy exporter, while the Chinese yuan and the Singapore dollar have held up. Asia's oil map is now a currency map: exporters of chips and energy on one side, importers of fuel and food on the other.</p>

<p>The week ahead is crowded. The US Federal Reserve decides on Wednesday and the Bank of Japan on Friday, where ING expects a hold at 1.25%. South Korea reports third-quarter growth, and China's leadership gathers for its Fifth Plenum. But for Manila, Mumbai and Jakarta, the number that matters most will again be the price of a barrel.</p>

<h2>Our read</h2>

<p>Asia's oil importers are fighting an imported shock with domestic tools. Higher rates can slow the slide in a currency, but they cannot lower the price of crude, and they squeeze growth that was already fragile. Manila's jumbo hike is the clearest sign yet that the region's central banks have moved from managing inflation to defending credibility. Until Hormuz is calm, oil, not central bankers, is setting the price of money across much of Asia.</p>

<h2>Sources</h2>

<ul>

<li><a href="https://www.investing.com/news/commodities-news/oil-little-changed-as-supply-concern-lingers-amid-houthi-attacks-on-saudi-arabia-4967907" target="_blank" rel="noopener">Reuters (via Investing.com)</a></li>

<li><a href="https://www.wsj.com/world/middle-east/oil-prices-rise-as-middle-east-risks-persist-c1262364" target="_blank" rel="noopener">Wall Street Journal</a></li>

<li><a href="https://www.smh.com.au/business/markets/asx-set-to-fall-wall-street-loses-ground-as-oil-prices-rise-20261026-p618gx.html" target="_blank" rel="noopener">AP (Troise/Veiga) via Sydney Morning Herald</a></li>

<li><a href="https://www.aa.com.tr/en/economy/brent-crude-hits-highest-since-june-2022-on-fears-of-renewed-us-strikes-on-iran/4098685" target="_blank" rel="noopener">Anadolu Agency</a></li>

<li><a href="https://www.channelnewsasia.com/business/philippine-central-bank-delivers-larger-expected-50-bps-hike-combat-inflation-6481711" target="_blank" rel="noopener">Reuters via CNA</a></li>

<li><a href="https://www.gmanetwork.com/news/money/economy/1006812/bsp-hikes-rates-by-50-basis-points-amid-expected-inflation-el-ni-o-effects/story/" target="_blank" rel="noopener">GMA News (gmanetwork.com)</a></li>

<li><a href="https://www.straitstimes.com/business/economy/philippines-surprises-with-jumbo-hike-as-inflation-surges-peso-slumps" target="_blank" rel="noopener">Straits Times</a></li>

<li><a href="https://www.gmanetwork.com/news/money/economy/1006814/peso-weakens-to-p63-52-1-the-30th-record-low-of-2026/story/" target="_blank" rel="noopener">GMA News (gmanetwork.com)</a></li>

<li><a href="https://www.philstar.com/business/2026/10/23/2565042/peso-weakens-record-low-63521" target="_blank" rel="noopener">Philstar</a></li>

<li><a href="https://www.business-standard.com/finance/news/rupee-s-recovery-faces-hurdles-from-dollar-demand-capital-outflows-126102500370_1.html" target="_blank" rel="noopener">Business Standard</a></li>

<li><a href="https://www.brecorder.com/news/40445690" target="_blank" rel="noopener">Reuters via Business Recorder</a></li>

<li><a href="https://www.marketscreener.com/news/bears-maintain-grip-on-oil-importing-asian-currencies-as-crude-prices-bite-ce785ad3df89f72c" target="_blank" rel="noopener">Reuters via MarketScreener</a></li>

<li><a href="https://economictimes.indiatimes.com/markets/us-stocks/wall-street-guide/5-world-market-themes-for-the-week-ahead/articleshow/135161184.cms" target="_blank" rel="noopener">Reuters week-ahead via Economic Times</a></li>

<li><a href="https://think.ing.com/articles/asia-week-ahead-231026/" target="_blank" rel="noopener">ING THINK</a></li>

</ul>