The impact of oil price changes on Asian economies was studied using a model that identified different types of oil shocks. Results showed that when oil supply is disrupted, the effect on the economy is limited. However, when global economic activity drives oil demand, it has a positive impact on economic activity and prices in Asian countries. Japan and Korea can use tools like interest rates and exchange rates to lessen the impact of supply shocks, but these tools can be more effective in responding to demand shocks.