Singapore minister says worst case on war not fully priced

Since the global conflict began in late February, global equities are down less than 6% while oil prices have soared. Even the dollar, a reliable haven in times of geopolitical uncertainty, has weakened since touching a 2026 high late last month.

While Balakrishnan – like many in Asia – questioned the need for US military action in Iran, he sees Washington’s main regional rival, China, as not seeking to exploit the situation.

China has been “stable, careful, deliberate – focusing on its domestic economy and not trying to take advantage of what made things worse on the global stage,” he said, adding he views the moves as “strategically wise actions.”

The effective closure of the Strait of Hormuz has disrupted a critical artery for oil and gas shipments to Asia, forcing buyers to scramble for alternative supplies and pushing prices higher. The chokepoint handles about a fifth of the world’s LNG supply.

Governments are already warning of a more challenging outlook as higher import bills feed into inflation and growth. Singapore imports nearly all of its energy and relies on natural gas for more than 90% of its electricity generation, leaving it highly sensitive to swings in global fuel prices and supply disruptions.

“We’re trying to be upfront with our people and tell them this is serious, this could get worse,” Balakrishnan said. “We all need seat belts.”

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