Oil supply secured, but prolonged high costs loom: Shanmugam

Fuel prices are likely to remain high amidst damaged Middle East infrastructure.

Singapore has maintained access to crude oil supplies despite disruptions linked to the Middle East conflict, but is facing higher energy costs, said K Shanmugam, Coordinating Minister for National Security.

“We have secured crude oil supplies from alternative sources,” Shanmugam said, adding that there is currently no need for fuel rationing.

However, fuel and energy prices are likely to remain elevated even if the conflict ends, due to damage to energy infrastructure in the Middle East.

“Even if the Strait of Hormuz fully reopens tomorrow, global oil and gas export capacity will not return to pre-conflict levels quickly,” he added.

To mitigate risks, gas imports have been diversified beyond the Middle East, with supplies sourced from countries including Australia, the United States, and Mozambique.

Meanwhile, a centralised gas procurement entity, GasCo, has begun replacing disrupted supplies from Qatar.

Moreover, Shanmugam said Singapore will continue to diversify energy sources, with plans to continue deploying solar energy and pursue electricity imports in the near term.

“In the medium to long-term, we are assessing other sources of energy to diversify our fuel mix,” he said. “One potential source is nuclear energy.”