ADB trade finance activity jumps as Hormuz crisis squeezes Asian markets

The Asian Development Bank has reported a sharp rise in trade finance activity as Asian markets face pressure from the Middle East crisis and disruption around the Strait of Hormuz.

The increase reflects growing demand for support from importers, exporters and banks exposed to higher energy costs, shipping delays and supply chain uncertainty.

ADB has already warned that the Middle East conflict affects Asia and the Pacific through higher energy prices, trade disruption, tighter financial conditions and weaker remittance flows. The pressure is especially acute for economies dependent on imported fuel and critical goods.

Trade finance becomes more important in this environment because businesses need more liquidity to move the same volumes of goods. Higher freight and insurance costs can also increase the size of facilities required for each shipment.

The rise in activity shows how multilateral trade finance programmes are being used as short-term stabilisers during geopolitical shocks. They help local banks maintain lines for customers when commercial risk appetite weakens.

For Asian markets, the issue is broader than oil. Disruption to shipping routes can affect food, industrial inputs, fertiliser and consumer goods, increasing working capital strain across supply chains.

The development also reinforces the growing role of development banks in trade resilience. As geopolitical disruption becomes more frequent, trade finance capacity is increasingly being treated as part of economic stability.