As an uneasy two week ceasefire was announced In the Middle East Singapore’s deputy prime minister has said the country is and will continue to be impacted by the conflict as will the wider Asia region and keeping global trade flowing and open remained vital.

Gan Kim Yong, (above) who is also the country’s minister for trade and industry was providing an update in the impact of the war in Singapore and its economy in the hours before the cease fire was announced by US present Donald Trump.

He said there were already impacts and the longer the conflict continued the greater the pressure. However, he added Singapore remain resilient.

“The conflict between the US, Israel and Iran has entered its sixth week, and spread across the wider Middle East,” he explained. “Within days of the conflict, Iran effectively closed the Strait of Hormuz. It has also attacked close to 20 vessels. I

“Last month, only about six vessels on average passed through the Strait of Hormuz each day, compared to around 135 in normal times. President Trump has said recently that the US has almost accomplished its goals in Iran, but it is still not clear when the conflict will end and when the Strait will be re-opened.”

Gan added: “In the near term, the closure of the Strait has caused a global shortage of energy supplies, including crude oil and gas. Before the conflict, one quarter of the world’s supply of seaborne oil and one-fifth of its gas transited through the Strait. More than 80% of these flows were bound for Asia.

“Such a severe choking off of supply is unprecedented – it is the worst disruption since the 1973 oil embargo. The fuel shortages have caused a surge in global energy prices. Since the onset of the conflict, Brent crude oil prices have doubled, from US$71 per barrel (/bbl) just before the conflict to a peak of $141/bbl. Similarly, spot liquefied natural gas (LNG) prices have also doubled, from $11 per million British Thermal Units (/MMBtu) to as high as $22/MMBtu.

“The disruption extends to other key products too, particularly those that use oil and natural gas as feedstock or starting material.

“One example is fertilisers. Most fertilisers are made using natural gas, and the Middle East is a key global producer of fertilisers, second only to Russia. Nearly a third of the world’s fertiliser trade is shipped through the Strait. The supply disruption has led to soaring fertiliser costs. If farmers reduce or stop fertiliser use, crop yields will fall, raising global food prices. Other industries are also affected. This includes aluminium, which is used to manufacture cars, airplanes and many other products; as well as helium, which is needed for producing semiconductor chips and cooling magnetic resonance imaging (MRI) machines.

“These disruptions are cascading through the global economy.”

He continued explaining higher energy prices have also increased transport and shipping costs. Airfreight rates between Asia and Europe have almost doubled since the conflict began.

“This will eventually push up costs of other items including food and grocery supplies,” Gan continued. “Rising business costs and consumer prices will in turn dampen demand and slow down the global economy.

“Many Asian currencies have weakened against a stronger US dollar, compounding inflation and growth risks in these countries. All of these pressures could intensify further in the coming week.

“As a small and highly open economy, Singapore will not be able to insulate ourselves completely from this crisis. We must respond with a coordinated, multi-agency effort to cushion the impact on our people and our economy.”

With pressure on cost and rising supply shortages Gan said the government now expects Singapore’s overall inflation for 2026 to be higher than earlier projected.

“If the conflict is protracted, higher inflation in our source markets could also lead to further increases in import prices over time,” he cautioned. “These pressures will be felt by households in more expensive electricity, transport and daily necessities.”

Gan said: “The crisis is unlikely to be over anytime soon, and we must be prepared for its effects to persist for some time. Even more worrying is the risk of escalation – including further damage to energy infrastructure, or a prolonged blockade of the Strait of Hormuz.

“This could trigger a global energy crunch – slowing global growth and pushing up inflation worldwide. This crisis has reminded us again of how interconnected – and how fragile – the global system is. We need to be prepared for more frequent inflation shocks and supply chain disruptions in a world of heightened geopolitical contestation.”

“We will strengthen our resilience by building up inventories and diversifying our sources of supply, but Singapore will always remain dependent on imports for our supplies,” Gan said. “It is therefore critical that we continue to strengthen our partnerships with like-minded countries and uphold an open and rules-based trading system. As a trading nation, keeping faith with our partners and maintaining our credibility is crucial.”

Speakingin Singapore in the hours after the ceasefire announcement  the head of the international Air Transport Association (IATA), Willie Walsh, (below) said the impacts on access to aviation fuel would continue to be felt after the end of hostilities.

Talking to journalists Walsh said fuel costs were likely to remain ‌ elevated.

“If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be given the disruption to the refining capacity in the Middle East, which is a critical part of the global supply of refined products, ‌and not just jet fuel for other products as well,” he explained

Walsh added: “So there is (refining) capacity available once we get the crude oil flowing, but it’ll take a little bit of time.”