Singapore to expand fuel reserves as Middle East conflict drives high energy costs: Shanmugam

Singapore will expand its fuel reserves and prepare for sustained high energy costs as ongoing conflict in the Middle East threatens prolonged disruptions to global oil and gas supplies.

Coordinating Minister for National Security K. Shanmugam said in Parliament on 7 April 2026 that oil prices are likely to remain elevated even after hostilities cease, with infrastructure damage expected to delay recovery in supply capacity.

“If the conflict is prolonged, then we have to expect much sharper increases in electricity prices,” he said, warning that current price stability may not hold under extended disruptions.

Singapore has not yet drawn on its fuel reserves or implemented rationing measures. However, authorities are preparing for scenarios where supply constraints worsen and alternative sources become limited.

Energy supply resilience under strain

Singapore’s electricity system remains heavily dependent on natural gas, which accounts for approximately 95 per cent of power generation.

To mitigate risks, power plants have the capability to switch from natural gas to diesel when necessary. This flexibility has helped cushion electricity prices amid volatility in global energy markets.

Additional safeguards were introduced in 2023, when the Energy Market Authority tightened regulatory requirements on electricity retailers. These measures ensure retailers are sufficiently hedged against prolonged gas price fluctuations.

Despite these buffers, K. Shanmugam cautioned that disruptions to fuel and gas supplies could eventually affect domestic electricity availability.

“While this remains a low-probability scenario for now, potential disruptions to domestic energy and electricity supply cannot be ruled out,” he said.

Authorities are continuing to monitor developments closely, particularly as geopolitical uncertainties persist.

Fuel reserves to be expanded

Singapore is now planning to increase its fuel reserves, even though doing so will involve significant cost.

“It will be costly but we think it necessary,” K. Shanmugam said.

The country’s reserves consist of a mix of natural gas and diesel, held both by the Government and power generation companies.

While the exact size of these reserves is not publicly disclosed, K. Shanmugam emphasised that sufficient buffers and contingency plans are in place.

“Disclosing such details would reveal where our limits lie, and that could be used against Singapore in times of crisis,” he said.

Oil price pressures expected to persist

Global oil prices have surged significantly since the escalation of hostilities, with Brent crude rising as much as 70 per cent since 28 February 2026.

More than half of Singapore’s crude oil imports originate from the Middle East, making the country particularly exposed to disruptions in the region.

Although Singapore has secured alternative crude oil supplies, these come at higher cost, contributing to rising energy prices domestically.

K. Shanmugam warned that prices are unlikely to return to pre-conflict levels quickly, even if hostilities end.

Damage to critical infrastructure in key producing countries, including major oil facilities in Saudi Arabia and Bahrain, is expected to take time to repair.

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

Beyond energy, the disruption of key shipping routes such as the Strait of Hormuz also threatens the supply of other critical materials, including helium and aluminium.

Supply chain vulnerabilities and economic impact

The broader impact of the conflict extends beyond fuel, with global supply chain disruptions posing risks to essential goods and services in Singapore.

Authorities have indicated that reliance on traditional supply routes may no longer be viable under prolonged instability.

The Ministry of Trade and Industry is working with relevant industries to monitor developments and strengthen supply chain resilience.

Singapore’s long-standing strategy of maintaining deep integration with global energy markets has helped ensure continued access to fuel supplies.

The country remains the world’s third-largest oil trading hub and sixth-largest refinery export hub, enabling it to meet both domestic needs and international obligations.

However, K. Shanmugam stressed that the duration and severity of disruptions remain uncertain.

“No one can say what the situation will be like if there are more serious disruptions and they last longer,” he said.

Food security and consumer flexibility

In addition to energy concerns, the Government is also addressing potential risks to food supply.

Singapore maintains strategic stockpiles of essential food items, which can help mitigate short-term disruptions.

However, these stockpiles are limited to key staples and do not cover the full range of imported food products.

“Food supplies from some countries may become unavailable,” K. Shanmugam said, urging consumers to remain flexible in their choices.

Efforts are underway to review and strengthen food supply chains to enhance resilience against future shocks.

Crisis management coordination intensified

The Homefront Crisis Ministerial Committee, chaired by K. Shanmugam, has been actively coordinating Singapore’s response to the evolving situation.

The committee serves as the top steering body for national crisis management, overseeing issues such as energy security, food resilience, supply chains, and security developments.

Over the past month, both the committee and the Homefront Crisis Executive Group have met multiple times to assess risks and prepare contingency plans.

These efforts aim to ensure that Singapore is ready to respond effectively to a range of potential emergency scenarios.

Security measures and citizen support

Amid the heightened threat environment, security measures have been stepped up across the country.

Authorities have introduced increased checks at checkpoints and enhanced police patrols in areas of concern.

Singaporeans affected by the conflict in the Middle East were repatriated through four flights in March 2026, organised by the Ministry of Foreign Affairs and the Ministry of Defence.

Ongoing travel disruptions in the region have also affected religious travel plans.

The Ministry of Culture, Community and Youth and the Islamic Religious Council of Singapore have been engaging affected individuals and travel agencies regarding umrah and Haj arrangements.

Balancing energy security and sustainability

While Singapore remains committed to long-term decarbonisation goals, immediate priorities have shifted towards ensuring energy security.

“For now, the priority worldwide is energy security. Countries everywhere need to keep the lights on,” K. Shanmugam said.

In the medium to long term, Singapore is exploring alternative energy sources to diversify its fuel mix.

This includes studying the potential adoption of nuclear energy, although K. Shanmugam emphasised that such a move requires careful and rigorous evaluation.

Dedicated government teams are continuing to assess the feasibility, risks, and requirements associated with nuclear power.