Asia Intelligence Brief — March 13, 2026

1 Pakistan bombs Kam Air fuel depot near Kandahar airport — Taliban calls it “significant escalation”; first strike in over a week despite China’s mediation; retaliatory Afghan drone strikes hit Pakistani base in Kohat; UN aircraft fuel supply threatened — Pakistan bombed the fuel depot of private airline Kam Air near Afghanistan’s Kandahar airport on Friday, the Taliban said, marking a significant escalation in the worst conflict between the neighbours in years; Taliban spokesperson Zabihullah Mujahid said the depot “supplies fuel to civilian airlines as well as to United Nations aircraft”; Afghanistan’s defence ministry said it carried out retaliatory drone strikes on a Pakistani military base in the northern city of Kohat, claiming heavy damage; the strike came after more than a week of relative calm following China’s stepped-up mediation efforts; ground clashes along the 2,600-kilometre border had tapered off but intermittent fighting continued; Islamabad says Kabul provides safe haven to militants executing attacks on Pakistan; the Taliban denies the allegation and calls militancy Pakistan’s internal problem; Pakistan’s military did not respond to requests for comment

2 South Korea imposes fuel price cap for first time since 1997 — won hit weakest level since 2009 at ₩1,506/$; President Lee orders 100 trillion won (~$68bn) market stabilisation; 22.46M barrels released from reserves; Seoul opposes US redeploying air defence systems to Middle East — South Korea introduced a maximum price system on petrol and diesel for the first time in nearly 30 years as gasoline hit ₩1,889/L (~$1.28) and diesel ₩1,910/L (~$1.30); President Lee Jae Myung ordered the cap at an emergency economic review meeting on March 9, instructing officials to implement it “as quickly as possible”; the won hit an intraday low of ₩1,506.37/$ on March 3, its weakest since the 2009 financial crisis; Seoul released 22.46 million barrels from strategic reserves as part of the IEA’s 400-million-barrel coordinated release; the government launched a 100 trillion won (~$68 billion) market stabilisation programme on March 6; on Friday, South Korea said it is considering energy vouchers and boosting coal and nuclear power; separately, Seoul opposed US plans to redeploy air defence systems stationed in South Korea to the Middle East, citing regional security concerns

3 Hong Kong’s biggest financial raids since 2017 — ICAC and SFC arrest 8 in HK$315M ($40M) insider trading probe; Guotai Junan and Citic Securities offices raided; hedge fund Infini Capital targeted; city’s IPO credibility at stake — Hong Kong’s Independent Commission Against Corruption and Securities and Futures Commission conducted a joint operation codenamed “Fuse” on Tuesday and Wednesday, arresting six men and two women aged 35 to 60 and raiding 14 locations including the offices of three firms; Guotai Junan International confirmed its head of equity capital markets Samuel Pan was detained and suspended; Citic Securities confirmed its Hong Kong subsidiary was searched and documents seized; hedge fund Infini Capital Management, founded by former Morgan Stanley banker Tony Chin, was also targeted; the suspects allegedly profited HK$315 million (~$40 million) from insider dealing by shorting stocks using leaked placement information; the probe is the largest joint ICAC-SFC operation since the 2017 “Enigma Network” case; it comes as Hong Kong reclaimed its position as the world’s top IPO destination with its busiest start to new listings in 2026

4 Indonesia faces food security “time bomb” as fertiliser supply collapses — 40% of global urea exports transit Hormuz; only 25 days of fuel reserves; 2026 budget based on $70 crude now facing $100; every $1 rise adds Rp 10.3 trillion (~$650M) in subsidy costs; Ramadan bookings slump — The Jakarta Post warned Friday that Indonesia’s parallel fertiliser vulnerability is receiving almost no attention alongside the fuel crisis; roughly 40% of global urea exports pass through the Strait of Hormuz, and urea is the primary input for Indonesian agriculture; Indonesia relies on the Middle East for nearly 70% of its sulfur imports; the country can produce only 3.5 million tonnes of the 13 million tonnes of fertiliser needed domestically; the 2026 state budget assumed an Indonesian crude price of $70 (~Rp 1.1 million) per barrel — every single-dollar increase above that adds Rp 10.3 trillion (~$650 million) in subsidy costs while returning only Rp 3.6 trillion (~$227 million) in revenue; Ramadan holiday transport bookings are significantly down on last year, signalling a fragile consumer economy; energy reserves cover approximately 25 days

5 Asia-Pacific markets post worst week of 2026 — Nikkei drops 1.16%; Khamenei vows Hormuz stays shut; Brent closes above $100 for first time since 2022; Goldman sees $98 average in March-April; US recession probability hits 32%; Cathay Pacific doubles long-haul fuel surcharges — Asian markets fell broadly on Friday after Iran’s new supreme leader Mojtaba Khamenei declared the Strait of Hormuz would remain closed and warned Tehran could open other fronts; Brent settled at $100.46 on Thursday, its first close above $100 since August 2022; WTI surged 9.7% to $95.73; the Nikkei 225 dropped 1.16% to 53,819; Wall Street posted its worst session of 2026 overnight with the S&P 500 falling 1.52% and the Dow shedding 739 points; Goldman Sachs forecast Brent averaging $98 in March-April before easing to $71 by Q4; US recession probability on prediction market Kalshi hit 32%, the highest of 2026; Cathay Pacific hiked fuel surcharges with long-haul surcharges more than doubling to $149.20; India’s February CPI accelerated to 3.21%, above the 3.10% consensus, with Nomura warning the “Goldilocks narrative” is over

SECURITY Pakistan striking Kam Air’s fuel depot near Kandahar airport — a facility that serves civilian airlines and UN aircraft — crosses from counter-terrorism operations into targeting civilian infrastructure. China’s mediation had produced a week of quiet. That quiet is now broken. The question is whether Beijing views this as a setback to be repaired or a failure that reduces its appetite for the role.

MACRO South Korea’s fuel price cap is the most dramatic economic intervention in Asia since the 1997 crisis — and the symbolism is intentional. Seoul is signalling that this is not a routine oil spike; it is a structural emergency. The won at 2009 lows, a 100 trillion won (~$68 billion) stabilisation fund, and opposition to US air defence redeployment together paint a picture of a US ally questioning the cost of American strategic priorities.

MARKETS Operation Fuse is the right probe at the wrong moment. Hong Kong just reclaimed the world’s #1 IPO ranking and is having its busiest listing start ever. Arresting senior executives at Guotai Junan and Citic Securities — two of China’s most prominent brokerages — sends a credibility signal, but it also reminds international investors that regulatory risk in Chinese financial markets is never far from the surface.

FOOD Indonesia’s fertiliser exposure is the sleeper crisis of the Iran war. The country produces 3.5 million tonnes of the 13 million it needs; 40% of global urea transits Hormuz; 70% of sulfur imports come from the Middle East. The budget is already underwater at $100 oil. If the next planting season is compromised, the political consequences for Jakarta will arrive long after the war ends.

GEOPOLITICS The Atlantic Council’s observation that the oil crisis “might empower Beijing relative to its regional rivals” is the most important strategic assessment of the week. China has more domestic production, 130+ days of reserves, and less oil intensity per unit of GDP than Japan, South Korea or Taiwan. The war America is fighting in Iran is weakening America’s allies in Asia — and strengthening the one country Washington considers its primary competitor.

1 Asia-wide energy austerity measures multiply — Pakistan closed schools and imposed 4-day government workweek; Philippines 4-day week for some government officers, AC set to 24°C minimum; Bangladesh closed all universities; India invoked emergency powers to divert fuel from industrial to household use; as covered in yesterday’s Asia Intelligence Brief, the region’s thin reserves make this a consumer emergency, not just a market event.

2 Japan to begin 80M barrel reserve release from March 16 — PM Takaichi acted unilaterally before IEA coordination; Japan sources 95% of crude from the Middle East; private stockpiles already being tapped; release covers ~45 days of consumption, or ~20% of national reserves; Japanese refineries had warned of severe shortages.

3 Global fertiliser crisis accelerates — Qatar Energy halted sulphur production after drone strike damage; three Indian urea plants cut output on Qatar LNG shortfall; urea spot prices doubled in 72 hours; India buys 40%+ of urea from Middle East; Indonesia relies on region for 70% of sulfur; spring planting season at risk across global agriculture.

4 ASEAN calls for restraint and immediate cessation of hostilities in Middle East — the statement on Friday came as the Philippines, ASEAN’s 2026 chair, looks to regulate its power market amid surging LNG prices; Manila also signalled interest in joining the US Pax Silica critical minerals initiative.

5 Philippines unemployment jumps to 5.8% in January — three-year high — the data released Friday highlights underlying economic fragility even before the oil shock; the Philippines has approximately 50–60 days of fuel reserves; overseas Filipino worker remittance flows through Gulf aviation hubs are now disrupted.

6 Chinese fighter jets stopped buzzing Taiwan for nearly two weeks — reason unknown — CNN reported the unexplained pause; it comes as Beijing wrapped up its annual political congress with a new plan to challenge the US; some analysts link the pause to diplomatic calculations around the Iran conflict consuming US bandwidth.

Lee Jae Myung — South Korean President imposed the country’s first fuel price cap since 1997, launched a 100 trillion won (~$68 billion) market stabilisation programme, and opposed US plans to redeploy air defence systems from South Korea to the Middle East — the most assertive economic and security positioning by a Korean leader in decades.

Mojtaba Khamenei — Iran’s new supreme leader vowed Thursday that the Strait of Hormuz would remain closed and warned Tehran could open other fronts; his declaration drove Brent above $100 for the first time since 2022 and triggered the worst week in 2026 across Asian markets.

Sanae Takaichi — Japan’s PM announced the release of 80 million barrels from strategic reserves starting March 16, acting unilaterally before the IEA’s coordinated release; the decision acknowledged that Japan’s 95% dependence on Middle Eastern crude makes the Hormuz closure an existential supply risk.

Zabihullah Mujahid — Taliban spokesperson announced that Pakistan struck a civilian fuel depot near Kandahar airport serving airlines and UN aircraft, framing the attack as a violation of civilian infrastructure norms and raising the stakes in China’s mediation efforts.

Samuel Pan — Guotai Junan International’s head of equity capital markets was detained by Hong Kong’s ICAC in the largest insider trading probe since 2017; his arrest sent a signal through the city’s financial sector at the moment Hong Kong is celebrating its return to the top of the global IPO rankings.

1 BoJ rate decision — March 19 — observers divided on whether the Middle East conflict will spur or suppress Japan inflation; the oil shock imports inflation via energy costs but risks recessionary demand destruction; Takaichi’s reserve release buys time but does not resolve the supply question.

2 RBI next steps — February rate cut to 5.25% now looks premature; Nomura expects a “policy hold from here on”; India’s 30% crude and 90% LPG exposure via Hormuz means imported inflation is inevitable; the government invoked emergency powers to prioritise household fuel; three urea plants already cutting output.

3 Hong Kong SFC — market integrity enforcement — Operation Fuse targets insider dealing in share placements; SFC had already warned brokerages about sloppy IPO filings; prior probes include charges against a former HKEX employee and the Segantii Capital Management investigation; enforcement push aims to protect the city’s #1 global IPO ranking.

4 South Korea air defence dispute with US — Seoul’s opposition to redeploying US THAAD and Patriot systems to the Middle East reflects growing tension between alliance obligations and domestic security; the Atlantic Council warned the oil crisis may empower China relative to its regional rivals; the dispute adds to broader US alliance management challenges in Asia.

Pakistan’s Kandahar strike rewrites the rules of a conflict that had been de-escalating under Chinese mediation. Bombing a civilian fuel depot that serves airlines and UN aircraft is not a counter-terrorism operation — it is infrastructure targeting. Beijing’s response will determine whether this becomes a sustained bilateral war or a temporary setback in the diplomatic process that had been producing results.

South Korea’s emergency measures tell you everything about the Iran war’s second-order effects in Asia. A fuel price cap — the first since the 1997 crisis — a 100 trillion won (~$68 billion) stabilisation fund, strategic reserve releases, and opposition to US air defence redeployment, all within one week. Seoul is not managing a market disruption; it is managing a structural shock that threatens the foundations of its export economy and its security alliance simultaneously.

Hong Kong’s Operation Fuse is well-timed enforcement that carries collateral risk. Arresting insiders at Guotai Junan and Citic Securities — the same brokerages leading the city’s record IPO pipeline — sends a strong signal on market integrity. But it also reminds global investors that Hong Kong’s regulatory environment can shift rapidly, and that the boundary between enforcement and political signalling in Chinese financial markets remains ambiguous.

Indonesia’s fertiliser crisis is the most under-reported story in Asia. The fuel emergency dominates headlines, but the food security vulnerability is more dangerous. Indonesia produces 3.5 million tonnes of the 13 million it needs; 40% of global urea transits Hormuz; 70% of sulfur imports come from the Middle East. If the next planting season is compromised, the inflation that follows will not be a market event — it will be a political one.

The Atlantic Council’s assessment that the oil crisis “might empower Beijing relative to its regional rivals” deserves to be the framing for the entire Asian intelligence picture. Japan sources 95% of crude from the Middle East. South Korea’s won is at 2009 lows. India is rationing LPG. Indonesia has 25 days of reserves. Meanwhile, China has 130+ days of reserves, domestic production, and lower oil intensity per GDP unit. The war America is fighting in the Gulf is weakening America’s allies in the Pacific — and the beneficiary is the competitor Washington says it is most concerned about.