The Iran War Is Repricing Central Asia’s Connectivity

Europe’s aviation regulator has extended its current conflict-zone bulletin for the Middle East and Persian Gulf through April 10 and continues to advise operators to avoid Iranian and adjacent airspace at all altitudes. Reuters reported soon after that the squeeze on normal flight paths was pushing more traffic into narrower routes, notably over Azerbaijan and Central Asia. The Strait of Hormuz, meanwhile, has not returned to normal commercial use. A limited number of exempted vessels have crossed, but passage remains selective, politicized, and uncertain rather than routine. The question, consequently, is no longer only whether Central Asia has alternatives to single-route dependence but whether those alternatives remain commercially usable, taking into account the increased risk, delay, insurance, fuel burn, and congestion. What has changed is the cost of maintaining reliable connectivity. The Cost of Reliability The Iran conflict imposes higher operating costs on the wider Eurasian air corridor that is now taking displaced traffic. EUROCONTROL estimates that about 1,150 flights a day continue to be affected by re-routing linked to the Middle East crisis. These add roughly 206,000 kilometers of flying and 602 tons of extra fuel burn per day. Maritime trends are similar. In March, war-risk premiums in or near the Gulf had risen more than tenfold in some cases, with hull war premiums moving from about 0.25% of vessel value to as much as 3%. Air-freight rates on some routes rose by as much as 70% as shippers redirected urgent cargo away from disrupted sea lanes and restricted airspace. Higher surcharges and narrower margins for operational error can make routes lose commercial value even if they remain formally open. The wider macroeconomic setting has also made resilience more expensive. Higher oil prices make every detour costlier, raising freight charges, power costs, and production costs across the region’s trading partners. Even where Central Asian cargo does not move through Iranian waters, the same pattern is still present. Asian policymakers were already confronting a combined oil-price and currency shock at a moment when roughly 80% of the oil shipped through Hormuz normally goes to Asia. The World Bank’s March food and nutrition security update notes that around 20% of global oil supplies and about one-third of global fertilizer trade transit the Strait of Hormuz. Urea prices, for example, surged by nearly 46% month on month between February and March 2026. Importers in Central Asia, as well as in Europe and the South Caucasus, remain under pressure from higher household food costs and tighter producer margins. The price of resilience is now showing up in increased costs for farm inputs, food costs, and household budgets. How the Burden Falls Kazakhstan remains the best placed in the region to absorb the shift. The CPC pipeline still carries about 80% of Kazakhstan’s oil exports; oil income contributes 52% of the state budget. Earlier disruptions had constrained Kazakhstan to reroute 300,000 tons of crude, and the country continues to rely on supplementary outlets such as Ust-Luga, the Baku–Tbilisi–Ceyhan pipeline, and China when its main...