What the Iran war shows about Singapore's energy resilience for now and the future

## Summary
Advertisement Big Read What the Iran war shows about Singapore's energy resilience for now and the future As the conflict in the Middle East disrupts a key global oil and gas supply route, Asian economies are bearing the brunt. Related: PM Wong warns of severe consequences from Middle East energy disruptions, convenes ministerial task force CNA Explains: Why Asia will bear the economic brunt of the Iran war But to be sure, the Singapore navigating this current crisis is not the same one that weathered the shocks of the 1970s or even the 2000s, having since diversified its energy sources, built up strategic stockpiles and invested in infrastructure designed to buffer against supply disruptions. "I would be careful about drawing a straight line to 2008; the similarity is imported inflation and weaker global confidence, but the difference is that Singapore today is far more tied to gas and LNG dynamics," said Professor Lee Poh Seng, executive director of the Energy Studies Institute at the National University of Singapore (NUS). In response to queries from CNA TODAY, a spokesperson from the Energy Market Authority (EMA) said that although the ongoing Middle East conflict has disrupted global fuel supply chains and led to significantly higher oil and gas prices globally, Singapore maintains "multiple lines of defence" to safeguard its energy supply, including diversifying natural gas sources. Mr Suwanto, the head of Fossil Fuels, Hydrocarbon and Minerals department at the ASEAN Centre for Energy said countries such as Thailand, Malaysia, Vietnam and the Philippines source around 60 to 95 per cent of crude oil from the Middle East. "Singapore remains one of the more resilient energy systems in Southeast Asia within the current situation, in terms of the origin of imported oil, which is more diverse compared to other neighbours, as well as its energy landscape," said Mr Suwanto, who goes by one name.

## Article Content
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What the Iran war shows about Singapore's energy resilience for now and the future
As the conflict in the Middle East disrupts a key global oil and gas supply route, Asian economies are bearing the brunt. Singapore is holding up so far, but it has more work to do in ensuring energy resilience over the long term.
In line with power sector decarbonisation goals and to manage growing energy demand, Singapore has adopted an energy strategy focusing on solar power, natural gas, regional power grids and low-carbon alternatives. (Illustration: CNA/Nurjannah Suhaimi)
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Nikki Yeo
Nikki Yeo
03 Apr 2026 09:30PM
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The year
was
1973. An oil embargo from Arab oil-producing nations against nations supporting Israel sent shockwaves through the global economy, pushing oil prices from around US$3 to over US$11 per barrel within months.
For a young Singapore heavily dependent on imported oil, this came as a blow, especially as it was unfolding amid an ongoing food crisis sparked by a year of poor harvests
globally
and sharply rising prices for essential agricultural products such as wheat and rice.
As the crisis hit, Singapore's gross domestic product growth fell from 11 per cent in 1973 to 7 per cent in 1974, before hitting a post-independence low of 4 per cent in 1975. Inflation jumped from 2 per cent in 1972 to a whopping 22 per cent by 1974.
By the end of 1974, oil prices had stabilised and the world eventually adjusted to higher oil prices.
More than three decades later in 2008, rising oil prices hit the Singapore economy again. Financial speculation and robust growth in developing economies drove the price of crude oil to new highs, eventually touching a record US$147 per barrel by mid-July of that year.
This pushed inflation in Singapore to a 26-year high of 7.5 per cent in May that year, as transportation, energy and food costs surged.
And in 2022, another shock: Oil prices spiked to around US$139 amid market supply fears following Russia's invasion of Ukraine.
Inflation in Singapore hit
6.1 per cent, the fastest rate of increase in consumer prices since 2008,
as the rise in oil prices once again contributed to higher costs for transportation, energy and food, while economic growth slowed to 3.8 per cent that year, from 7.6 per cent in 2021.
History looks to be repeating itself yet again. In the past five weeks, oil and gas prices have surged as the United States and Israel carried out military strikes across Iran.
But this is not a simple echo of the price shocks of before. For one, the International Energy Agency (IEA), which was formed in 1974 to ensure energy security through international cooperation in response to the 1973 oil crisis, has called it the "largest supply disruption in the history of the global oil market".
Unlike some previous shocks, when prices moved mostly on demand-led speculation, this crisis involves a physical inability to move oil: Iran has effectively blocked the Strait of Hormuz, a narrow waterway connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea, in retaliation against the US and Israeli strikes.
The strait is a key node for energy supplies: Last year, about a quarter of the world's seaborne oil trade – or around 20 million barrels per day of crude oil and oil products – passed through it.
Cargo ships in the Gulf, near the Strait of Hormuz, as seen from northern Ras al-Khaimah, near the border with Oman’s Musandam governance, amid the US-Israeli conflict with Iran, in United Arab Emirates, March 11, 2026. (Photo: Reuters)
This blockage is hitting the region especially hard, so much so that Singapore's Foreign Affairs Minister Vivian Balakrishnan has called it an "
Asian crisis
".
In 2025, about 80 per cent of the crude oil and oil product shipments and 90 per cent of liquefied natural gas (LNG) exported through the Strait of Hormuz were bound for Asian markets, according to the IEA.
Singapore, which now uses imported natural gas as the main fuel
to generate
around 95 per cent of its electricity, is directly exposed to any potential disruption affecting natural gas markets.
Furthermore, as infrastructure in the Middle East that serves oil and gas to the global market has been damaged and destroyed during the ongoing conflict, supply will not be easily resumed even if politics changes, said Dr David Broadstock, partner at The Lantau Group, an
energy consultancy.
In March, QatarEnergy's chief executive officer and state minister for energy affairs told Reuters that Iranian attacks‌ have
knocked out 17

---

## Expert Analysis

### Merits
- Financial speculation and robust growth in developing economies drove the price of crude oil to new highs, eventually touching a record US$147 per barrel by mid-July of that year.
- Being heavily reliant on gas, Singapore has built a robust portfolio of gas and LNG supplies, and the volume of active long-term LNG contracts exceeds the expected volume of LNG demand in 2026, which implies a reduced exposure to the spot market in a normal year, said Mr Pang. "This is typically not the case in other Southeast Asian countries, where they will still have more than a 40 per cent exposure to the spot market," he noted.
- Given a lack of natural resources, Singapore’s response to energy shocks is thus "unusually focused" on robust system design through diversification, infrastructure, procurement strategy and institutional coordination, said Prof Lee from NUS.
- Additionally, Singapore's strong fiscal position means that it can "tide through this crisis much longer", said Mr Sharad Somani, partner and head of Infrastructure at KPMG Asia Pacific.

### Areas for Consideration
- The challenge that Singapore faces today with regard to the current conflict in the Middle East is thus not around buying energy from Iran directly, but the fact that is a small, import-dependent economy plugged into a global energy system in which the Strait of Hormuz remains a critical chokepoint, he added. "In other words, Singapore is exposed not because it lacks planning, but because it sits downstream of a highly interconnected and geopolitically fragile energy system," said Prof Lee.

### Implications
- Advertisement Big Read What the Iran war shows about Singapore's energy resilience for now and the future As the conflict in the Middle East disrupts a key global oil and gas supply route, Asian economies are bearing the brunt.
- This pushed inflation in Singapore to a 26-year high of 7.5 per cent in May that year, as transportation, energy and food costs surged.
- Furthermore, as infrastructure in the Middle East that serves oil and gas to the global market has been damaged and destroyed during the ongoing conflict, supply will not be easily resumed even if politics changes, said Dr David Broadstock, partner at The Lantau Group, an energy consultancy.
- Related: PM Wong warns of severe consequences from Middle East energy disruptions, convenes ministerial task force CNA Explains: Why Asia will bear the economic brunt of the Iran war But to be sure, the Singapore navigating this current crisis is not the same one that weathered the shocks of the 1970s or even the 2000s, having since diversified its energy sources, built up strategic stockpiles and invested in infrastructure designed to buffer against supply disruptions. "I would be careful about drawing a straight line to 2008; the similarity is imported inflation and weaker global confidence, but the difference is that Singapore today is far more tied to gas and LNG dynamics," said Professor Lee Poh Seng, executive director of the Energy Studies Institute at the National University of Singapore (NUS).

### Expert Commentary
This article covers singapore, energy, gas topics. Notable strengths include discussion of singapore. Areas of concern are also raised. Readability: Flesch-Kincaid grade 0.0. Word count: 2437.