Sri Lanka, March 9 -- The Iran conflict could raise additional challenges for some emerging market sovereigns, through such channels as energy imports, remittances, fiscal subsidies, exchange rates and access to international finance, Fitch Ratings says. Hydrocarbon exporters could see positive effects. Under our baseline, in which the effective closure of the Strait of Hormuz lasts less than a month and major damage to the region's oil production infrastructure is avoided, risks to emerging market ratings should be contained, but a longer closure or more sustained effects could lead to a more substantial impact.
Oil and gas imports are the most direct channel for contagion from the conflict, given its effect on global energy prices. Net f...