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Published Mon, Mar 23, 2026 \u00b7 08:41 PM<\/span><\/p>\n<\/div>\n [SINGAPORE] The war against Iran threatens to send Asian economies into crisis, Singapore\u2019s Foreign Minister Vivian Balakrishnan said on Monday (Mar 23), a stark warning in a region that is acutely exposed to the massive disruption of Middle East energy supplies. <\/p>\n \u201cRight now, the closure of the Strait of Hormuz is, in a sense, an Asian crisis,\u201d he told Reuters.<\/p>\n In remarks made over an hour-long interview, he also raised questions about the necessity and legality of the US-Israeli war on Iran that is now entering its fourth week, saying the \u201centire global economy has been taken hostage\u201d by a conflict that could usher in a financial crisis.<\/p>\n The war has shut down the Strait of Hormuz through which 20 per cent of the world\u2019s oil and liquefied natural gas flows, pushing up oil prices and raising fears of a renewed spike in global inflation, with no clear end in sight.<\/p>\n While the US has become a net oil exporter, industry-heavy economies in Asia are far more reliant on crude oil from the Middle East, Dr Balakrishnan said.<\/p>\n Asia, the top oil-importing region, sources nearly 60 per cent of its crude and petrochemical naphtha feedstock from the Middle East. That exposure has led countries including China to halt refined fuel exports, while numerous petrochemicals plants and refineries in the region have scaled back operations or declared force majeure.<\/p>\n Get the insights delivered to your inbox.<\/p>\n<\/div>\n<\/div>\n Reuters reporting shows that around 80 per cent of the oil shipped through the Strait of Hormuz heads to Asian buyers.<\/p>\n \u201cThe vulnerability has been known, but it\u2019s never been tested to the extreme that it is being tested today,\u201d Dr Balakrishnan said. <\/p>\n He warned that much would be determined by whether US President Donald Trump followed through on his warning to destroy Iranian power plants if the Strait of Hormuz was not open to all shipping by around 2345 GMT on Monday. <\/p>\n In turn, Iran said it could attack Israel\u2019s power plants and plants supplying US bases in the Gulf. <\/p>\n \u201cIf indeed you get tit-for-tat destruction of energy infrastructure, then you\u2019re dealing not only with an immediate blockage of the straits, but (also) scarring of energy infrastructure from the Middle East, which means a prolonged period in which energy exports will be diminished,\u201d Dr Balakrishnan said, cautioning that would mean higher oil and gas prices, as well as greater inflation across the board.<\/p>\n He also said it is too early to tell if the situation will deteriorate to the levels of the 1997-to-1998 Asian financial crisis, which sent many countries in the region into recession and spread to the global economy. <\/p>\n But Singapore is dusting off contingency plans to not only weather the storm, but look for opportunities as well, he said. <\/p>\n Planning scenarios are framed around the next 18 hours, three months, and then the next three years, but Singapore aims to play to its strengths by relying on fiscal conservatism, international cooperation, and adapting to changes in global supply chains, he said.<\/p>\n \u201cIn the state of the world now, some stability, some predictability, some safety, will be a welcome bright spot in an otherwise difficult, volatile world,\u201d Dr Balakrishnan said.<\/p>\n Countries in Asia need to accelerate the push for renewable energy, boost power grids, update digital infrastructure, and retrain the labour force, while also keeping government coffers balanced and preventing runs on their economies or currencies, he added.<\/p>\n Dr Balakrishnan said he was disappointed that talks broke down between the US and Iran.<\/p>\n \u201cI will confess that I was surprised with the onset of hostilities. I did not think it was necessary. I don\u2019t think it\u2019s helpful, and even now, there are even doubts expressed about the legality of the situation.\u201d<\/p>\n Singapore is a long-time US investment and security partner, including extensive military training, logistics support and intelligence sharing.<\/p>\n It also trades heavily with China, and Dr Balakrishnan said it is not in Singapore\u2019s interest to be forced to choose sides.<\/p>\n \u201cFrom time to time, Singapore will have to say \u2018no\u2019 to the US or to China, but it must be very clear when we say \u2018no\u2019, it\u2019s not done at the behest of the other, but done after careful computation of our own long-term national interest,\u201d he said. REUTERS<\/p>\nMost vulnerable to Hormuz disruption <\/h2>\n
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a new global order<\/h3>\nSurprised by outbreak of war<\/h2>\n