A significant supply shock is affecting manufacturing across East Asia due to the ongoing blockade of the Strait of Hormuz amid conflict in the Middle East.

Naphtha, a vital petroleum derivative refined from crude oil, serves as a key building block for countless products including plastics, synthetic rubbers, inks, solvents, and medical devices.

Japan and South Korea, heavily reliant on naphtha imports from Qatar and Kuwait as well as crude oil shipped through the strait, are experiencing the most acute disruptions.More than 80 per cent of Japan's traditional naphtha supply lines have been severed.In Japan, food companies like Calbee and Kagome are reducing ink usage on packaging, leading to plainer designs.Supermarkets face shortages of plastic wrap, diaper prices are rising, and construction projects are delayed due to resin shortages.

South Korean petrochemical firms have cut production rates and declared force majeure on deliveries to car and electronics makers, sparking some consumer hoarding of plastic goods.

Experts warn that without alternatives, broader manufacturing impacts could intensify by June, particularly in critical areas like medical equipment where substitutions are difficult.Governments are scrambling for alternatives, with South Korea boosting imports from Russia and Japan seeking supplies from the United States.However, Japanese officials face public scepticism, as import data shows a 79 per cent drop in April compared to the previous year.Prime Minister Sanae Takaichi's cabinet has seen approval ratings drop sharply amid concerns over daily life impacts.

Economists note that naphtha acts as the primary channel transmitting Middle East shocks to Asian economies, feeding into everything from consumer goods to industrial production.Recovery appears dependent on restoring safe passage through the Strait of Hormuz.