Impact of Widening Conflict in the Middle East on Energy Prices and Inflation in Singapore

33 Mr Ang Wei Neng asked the Deputy Prime Minister and Minister for Trade and Industry (a) whether the impact on energy prices and inflation in Singapore will be significant following the escalation of conflicts between Israel, Lebanon and Iran; and (b) whether the Singapore economy will be severely affected by the widening conflict in the Middle East.

Mr Gan Kim Yong: Thus far, the direct impact of the widening conflict in the Middle East on the Singapore economy has been limited. The countries involved in the conflict are not Singapore’s major trading partners. The Brent crude oil price has risen to US$79 per barrel as of 11 October 2024, from US$74 per barrel in the month before, but it remains lower than the average price of US$89 per barrel in September 2023, just before the start of the Israel-Hamas conflict.

Nonetheless, the conflict in the Middle East, as well as the war in Ukraine, remain volatile. Further escalations in these conflicts could lead to a spike in oil prices, with wider repercussions on global growth and inflation and, in turn, the Singapore economy.

We will continue to closely monitor developments in the Middle East and the potential impact on the Singapore economy.