The ongoing Iran-U.S. conflict has had an adverse impact on the operations and profitability of almost all of the Asian coating producers. While peace talks between the opposing factions are going off-and-on, Coatings World examines how the current conflict has dented and continues to impact the region’s coating industry in this feature. 

Big Jolt to the Asian Coating Industry

To say that the ongoing Iran-U.S. conflict has negatively impacted the Asian paint and coating industry would be an understatement. The impact on the coating industry of some of the countries in the region is so severe that it will take months, if not a year, to completely recover from the shock. 

Coating producers in the Asia Pacific region are going through a highly challenging environment characterized by rising raw material costs, supply chain disruptions, and uncertain short and medium-term demand. 

Barring a few – Indonesia and Malaysia, and to some extent China – most of the countries across the region are experiencing severe disruption in raw materials supply after the U.S.-Iran conflict started on the last day of February. Coating producers are also struggling to manage supply chain disruptions, with some comparing the crisis’s impact to be as profound as the COVID-19 pandemic. 

India and the Philippines are two of the most affected countries, as they are highly dependent on crude oil imports from the Middle East region. Pakistan, Bangladesh and Sri Lanka are also badly affected. In 2025, Vietnam imported crude oil worth US$7.74 billion (14.15 million tons) from the Middle East region. According to Reuters, approximately 80% of the crude oil Vietnam imported in 2025 came from Kuwait, whose exports are currently frozen by Iran’s closure of the Strait of Hormuz. 

The region accounts for 69% of Malaysia’s, 59% of Thailand’s and 52% of Singapore’s crude oil imports. 

South Korea and Japan are cushioned from this shock to some extent due to larger strategic oil reserves, which can provide a temporary relief. However, both are vulnerable to a prolonged conflict, as they import between 70% and 95% of their oil, respectively, from the Middle East region. 

Paint producers in these countries are waiting with concern for the cessation of hostilities to resume their operations in the usual manner. However, even if there is a peace deal soon, it will take a long time for supply chains to resume their pre-Feb. 28 status. The indirect impact on paint and coating consumption in the region is expected to last for a longer time. 

Direct Impact

Disruption of crude flow to Asian countries due to the conflict and closure of the Hormuz Strait has directly impacted the crude oil-based inputs for Asian coating producers. Along with the availability, prices of these inputs have skyrocketed during the past 50 days, denting the production volume and margins of coating producers in the region. 

Brent crude prices have surged since the onset of the war and have remained in the range of $80-$120 during the past 50 days. Nearly 40-60% of the input/production cost for coating producers is derived from crude-based inputs such as binders, resins, solvents, and additives. 

Coating producers are not left with many options other than to raise prices of their offerings. However, rising prices will lead consumers to delay their painting or repainting exercise, resulting in loss of demand and lower growth for the industry. 

Jatuphat Tangkaravakoon, CEO of TOA Paint (Thailand) Public Company Limited, said, “Fighting in the Middle East would affect the business in the first quarter of 2026 because most of the company’s products are by-products of the petrochemical business, where upstream producers have shut down operations and reallocated supply.”

Indirect Impact

The U.S.-Israel vs. Iran war also affects labor migration in the region. Millions of Filipinos, Indians, Pakistanis and Bangladeshis, and hundreds of thousands of Indonesians and Thais work in different sectors in the Middle East. If the conflict persists longer, a reverse migration from the Middle East region to these countries will start, which will impact paint and coating consumption as all three countries rely heavily on remittances by these workers. 

The Philippine Central Bank estimates that remittances from the region account for 18% of the Philippine economy; for Pakistan and Bangladesh, the figure is between 5% and 9%, respectively. 

The Case of India

India is highly dependent on the Middle East region for crude oil imports. The country’s imports from the region were as high as 80% of its total requirements before the Russia-Ukraine war. Imports from Russia have dwindled since the start of this year. Currently, India is dependent on nearly 70% of its crude oil demand from Iraq, Saudi Arabia, and the UAE, with very little option to substitute these sources. 

Asian Paints, India’s largest coating producer, has undertaken two price increases on April 10 and 21. Berger Paints, India’s second largest producer, has increased its average prices by 8.5% during these one and a half months. 

The country’s other major players, such as Kansai Nerolac, Indigo Paints and JSW Paints, had already implemented price hikes of 6% to 8% in multiple phases during March and April.

A senior executive from the production planning department of Pune-based Indigo Paints told CW on condition of anonymity, “If the conflict continues for a longer time, a further increase of 6% to 8% could be announced by the middle of July as crude oil prices are expected to rise by up to 20% by early 2027 from the current levels.”

While large coating producers are deep-pocketed and in a better position to absorb these price shocks and disruptions, smaller coating producers face significant financial and operational risks. 

Vikas Antil, CEO of Sonipat-based architectural paint producer Shine Bright, told CW during a visit to their works, “The U.S.-Iran conflict has started to bite the Indian coating industry. The impact of the conflict on smaller producers like us is very severe. For a number of small-scale producers, it has become a question of survival. 

“Most of the products from smaller coating producers are meant for consumption in tier II, III and IV cities and villages, a sub-segment that is very price sensitive,” Antil added. “Small-scale producers are compelled to pass on higher costs on to consumers, but any price hike will lead to a delay in purchases by these consumers. Since the sub-segment accounts for a significant proportion of the total demand of architectural and industrial coating industry, slower uptake here will have a profound impact on the overall coating industry.”