Some United States importers have cut orders and shifted to short-term contracts after the Middle East conflict triggered a global oil crisis, according to Hong Kong business leaders, who warned of eroding profit margins and strained liquidity.

Jeffrey Lam Kin-fung, an Executive Council member and businessman, said on Sunday that the US-Israel war on Iran had driven up fuel costs, which in turn raised operating expenses for local enterprises.

He urged the Hong Kong government to bolster ties with Central Asia and Asean nations, framing the move as a vital strategy to diversify market risks.

“Orders are greatly affected, shifting from long-term to short-term, but costs have risen with no room to pass them on through price increases,” Lam said.

“The situation is unclear and will definitely impact the cash flow of Hong Kong small and medium-sized enterprises, so we cannot sit idly by.”

The Middle East conflict has entered its fourth week, with Iran sealing off the Strait of Hormuz and triggering a global oil crisis.