Stagflation Warning! PM Lawrence Wong Alerts Citizens to Middle East Energy Risks

JAKARTA – Singapore Prime Minister Lawrence Wong has warned that the world is facing a growing risk of a global energy crisis due to the escalating conflict in the Middle East.

In a public statement on Thursday, April 2, 2026, Wong stressed that the impact of the conflict is not limited to the region, but is also threatening global economic stability.

He noted that the conflict is unfolding on multiple fronts, ranging from ongoing military exchanges to disruptions in critical energy supply routes.

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One key flashpoint is the Strait of Hormuz, which is currently experiencing significant disruptions linked to Iran’s actions.

According to Wong, the flow of oil and liquefied natural gas (LNG) shipments through the strait has dropped sharply.

Beyond energy, the distribution of essential commodities such as fertilisers and helium has also been affected, raising concerns about potential disruptions to global food production.

The impact is already being felt. Global oil prices have surged by more than 60% since the conflict began.

Global supply chains are now under pressure, sparking concerns across many countries, particularly in Asia, which heavily depends on these energy routes.

Wong also highlighted the increasingly uncertain geopolitical situation. Despite ongoing diplomatic efforts, significant differences between parties remain.

The United States is reportedly aiming to end the conflict soon, even without a formal peace agreement, with the option of intensifying military strikes before halting operations.

However, even if a ceasefire is achieved, the effects of the conflict are expected to persist.

Damaged energy infrastructure could take months to recover, meaning energy prices are likely to remain elevated in the medium term.

Furthermore, the risk of escalation remains, including the possible involvement of other groups such as the Iran-backed Houthi forces.

This could open new fronts and extend disruptions to other key shipping routes, including the Red Sea.

Wong warned that prolonged disruptions to Middle East energy supplies could trigger a full-scale global energy crisis.

Such a scenario would not only drive up prices but also disrupt production activities and daily life.

In a worst-case scenario, the world could face stagflation — a dangerous condition where economic growth slows while prices continue to rise.

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In response, the Singapore government has established a national crisis committee to strengthen energy resilience and supply chain stability.

Measures include seeking alternative energy sources beyond the Middle East and strengthening partnerships with countries such as Australia and New Zealand.

Domestically, the government is also preparing support measures to cushion the impact on households and businesses, including additional electricity subsidies and targeted assistance for the most affected sectors.

Wong also urged the public and businesses to play their part by conserving energy and reducing unnecessary consumption.

He emphasised that small collective actions can make a significant difference in navigating the crisis.

He concluded by reaffirming that Singapore has weathered major global crises before—from the Asian Financial Crisis to the COVID-19 pandemic—and expressed confidence that the country can overcome this challenge through unity and resilience.