SINGAPORE – For every week that the war in the Middle East continues and the Strait of Hormuz remains closed, the risk rises of a major downturn in the global economy and of cost-of-living problems everywhere, said President Tharman Shanmugaratnam.
Prolonged fighting will not just result in fuel prices going up and staying high for longer, but also impact food supply and prices, as well as supplies of many other critical commodities that the world depends on, Mr Tharman said as he formally approved the Government’s spending plans for the coming financial year.
In social media posts on March 18, the President said the conflict represented “a major new stress point” for the global economy and financial markets, which were already under strain.
The war between the US, Israel and Iran, which is in its third week, has largely halted shipping through the Strait of Hormuz. The waterway between Oman and Iran has been critical to the transportation of about one-fifth of the world’s oil and gas.
This resulted in the international oil benchmark Brent crude hitting US$119.50 a barrel on March 9 – its highest since July 2022. Oil prices continue to hover above US$100 a barrel.
