SM Lee warns of energy price hikes as Gulf conflict strikes

The economy is vulnerable as tension breaks out between the US, Israel, and Iran.

Senior Minister Lee Hsien Loong said the conflict involving the US, Israel, and Iran will affect energy prices and impact countries beyond the Middle East, including Singapore.

“You can see how the war starts, but it is very hard to tell how the war will end,” Lee said during the Teck Ghee Chinese New Year Celebration Dinner on 28 February

On the same day, the US and Israel jointly attacked Iran, with Iran responding with strikes on cities and targets across Israel, Doha, Kuwait, Bahrain, and the United Arab Emirates.

According to Lee, tensions between the US and Iran had been building for weeks, with the US assembling military assets in the Middle East, including aircraft carriers, destroyers and missile systems.

On trade, Lee said the US Supreme Court had ruled that most tariffs imposed last year under the Trump administration were illegal.

The administration subsequently invoked another law to reimpose 10% tariffs, before President Donald Trump indicated that the rate would be raised to 15%.

“We watched with concern. But so far, the official US tariff rate is still 10%,” Lee added.

The senior minister noted that the events have created an overall climate of uncertainty that will dampen global trade, investment, cooperation, and prosperity.

businesses won’t know what to expect, where to invest safely, or what steps to take to ensure the company survives tomorrow and beyond, he said. “This is going to affect us too, as a small and open economy reliant on global trade and investments.”