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- The Homefront Crisis Ministerial Committee is focused on securing essential supplies, supporting businesses and workers, and providing targeted relief.
- Higher energy costs are expected to weigh on manufacturing, transport, and services, while households face rising electricity bills and daily expenses.
- Energy supply disruptions from the Strait of Hormuz closure have doubled oil and LNG prices, fuelling global inflation and slowing economic activity.
Last week, Singapore's Prime Minister Lawrence Wong briefly shared that a Homefront Crisis Ministerial Committee, chaired by Coordinating Minister for National Security K Shanmugam, with Deputy Prime Minister Gan Kim Yong as adviser, and comprising several ministries, has been convened in efforts to actively respond to the ongoing situation in the Middle East.
Speaking in Parliament on 7 April 2026, DPM Gan went into detail about what the committee will be focusing on, and how its efforts will aim to cushion the impact of the situation on Singapore, its people and the country's economy.
The Homefront Crisis Ministerial Committee
The Homefront Crisis Ministerial Committee will focus on four key areas:
- First, securing supplies, such as LNG and diesel for power, as well as other essential fuel products like jet fuel and motor gasoline.
- Strengthening Singapore's economic resilience by helping businesses to preserve their productive capacity and capability, and facilitating their transformation where necessary.
- Providing targeted help for those most affected by the crisis, including businesses in the energy and chemicals cluster, platform workers and low-income families.
- Helping workers with training and employment support, as well as providing households with broad-based help to address cost-of-living concerns.
Impact of the closure of the Strait of Hormuz
These key areas, as DPM Gan shared, comes after the closure of the Strait of Hormuz caused a global shortage of energy supplies, including crude oil and gas, therefore impacting global energy prices.
He elaborated that since the onset of the conflict, Brent crude oil prices have doubled, from US$71 per barrel (/bbl) just before the conflict to a peak of US$141/bbl. Similarly, spot liquefied natural gas (LNG) prices have also doubled, from US$11 per million British Thermal Units (/MMBtu) to as high as US$22/MMBtu.
Other key products, too, have been affected. For fertilisers, the supply disruption has led to soaring fertiliser costs. If farmers reduce or stop fertiliser use, crop yields will fall, raising global food prices. At the same time, aluminium, which is used to manufacture cars, airplanes and many other products; as well as helium, which is needed for producing semiconductor chips and cooling magnetic resonance imaging (MRI) machines, are affecting other industries too.
As such, these disruptions have affected the global economy:
- Higher fuel and raw material costs will raise business costs, some of which will pass through to consumers through higher prices.
- Higher energy prices have also increased transport and shipping costs. Airfreight rates between Asia and Europe have almost doubled since the conflict began.
- This will eventually push up costs of other items including food and grocery supplies.
- Rising business costs and consumer prices will in turn dampen demand and slow down the global economy.
- Many Asian currencies have weakened against a stronger US dollar, compounding inflation and growth risks in these countries.
Impact on Singapore
Economy and GDP growth
Despite early data indicating that Singapore's economic activity continued to be resilient in Q1 2026, growth in the coming quarters is likely to be affected due the ongoing conflict, of which some sectors will feel the strain more than others, such as:
- In manufacturing, the most direct impact will be on industries that rely on natural gas, crude oil and crude oil derivatives as feedstock.
- DPM Gan shared that as a result, refineries have adjusted by reducing their run rates and brought in shipments from sources outside of the Middle East.
- Downstream chemical firms will also be affected, with some firms already declaring force majeure due to upstream supply disruptions.
- Higher fuel and electricity prices will also affect a wider range of industries, including electronics, precision engineering and other energy-intensive clusters.
- In services, outward-oriented sectors like air and sea transport, as well as tourism, will be affected by higher costs and weaker demand.
- On the other hand, domestically oriented sectors such as retail, food services and private land transport will face higher operating costs, including utilities and fuel.
"Taken together, these sectoral impacts will weigh on economic activity in the coming quarters, although the extent remains uncertain as the conflict is still unfolding. MTI will continue to monitor developments closely and will update our GDP forecast in May," DPM Gan said.
Cost and inflation
In terms of inflation, the spike in global oil and natural gas prices will inevitably raise fuel and electricity costs for Singapore. The regulated electricity tariff, which most Singapore households pay, increased by 2.1% to about $0.27/kWh for the second quarter of 2026. While the increase is modest relative to the spike in fuel prices, this is because the tariff is based on fuel prices from the first 10 weeks of the preceding quarter (i.e., from January to mid-March).
This means only a small portion of the recent surge in fuel prices has been captured in the latest tariff adjustment. Given that fuel makes up about half of the tariff, higher fuel prices will continue to flow through to electricity costs. As such, a much sharper increase can be expected in the next tariff adjustment, which will more fully reflect the higher cost of fuel.
Further, earlier forecasts projected CPI-All Items and MAS Core Inflation to come in at 1.0% to 2.0% in 2026, following a broad easing in 2025. However, the situation in the Middle East has driven up global energy and commodity prices, which in turn is expected to push up global inflation. Consequently, Singapore’s overall inflation for 2026 is now expected to be higher than previously projected.
According to DPM Gan, should the conflict prolong, higher inflation in Singapore’s source markets could also lead to further increases in import prices over time. These pressures are likely to be felt by households through higher electricity costs, transport expenses, and the rising prices of daily necessities. Lower-income households will be disproportionately affected, as a larger share of their spending is allocated to essential goods and services.
Preparing for the longer-term impact
Looking forward, DPM Gan said the crisis is "unlikely to be over anytime soon, and we must be prepared for its effects to persist for some time."
In that vein, he noted that Singapore will strengthen its resilience by "building up inventories and diversifying our sources of supply", even as the nation remains inherently dependent on imports.
"It is therefore critical that we continue to strengthen our partnerships with like-minded countries, and uphold an open and rules-based trading system.
"As a trading nation, keeping faith with our partners and maintaining our credibility is crucial. We must foster the free flow of energy and goods as far as possible."
Owing to this notion, DPM Gan referenced PM Wong's statement that Singapore is committed to maintaining the flow of essential goods, including petroleum and LNG, in discussions with Australian Prime Minister Anthony Albanese and New Zealand PM Christopher Luxon, alongside efforts to strengthen supply resilience.
At the regional level, ASEAN Foreign Ministers and Economic Ministers discussed and underscored the importance of maintaining stable, open and reliable global energy supply chains, as well as the importance of minimising disruptions to the flow of essential supplies, including food.
Additionally, Singapore and 10 members of the Future of Investment and Trade Partnership (FIT-P) reaffirmed the importance of not imposing restrictive trade measures, including export restrictions, tariffs, and non-tariff barriers on essential goods.
Concluding this statement, DPM Gan shared that recognising the impact the crisis will affect households and businesses, the Government stands firm on supporting them through this period of uncertainty.
"Periods of disruption such as this will test the resilience of countries and economies, but they also create impetus for firms to transform, diversify, and deepen their capabilities."
He encouraged people to abide the recommendations of the Economic Strategy Review, of which to build global leadership in key growth sectors such as advanced manufacturing and modern services, support firms to diversify and internationalise, and accelerate enterprise transformation through technology and innovation, to ensure Singapore's economy remains resilient and competitive in a more challenging global environment.
Concurrently, this also means ensuring energy and supply chains stay resilient, deepen partnerships with like-minded countries, and stay open and connected to the global economy.
"If we stay disciplined, deepen our trust in each other, preserve our capabilities, and use this period to sharpen our competitive edge, Singapore will be well placed not only to weather this crisis, but to emerge from it stronger."
READ MORE: Corporate Income Tax rebate among measures to cushion impact of Middle East crisis on Singapore
Lead image / Screenshot of speech, aired on MDDI Singapore's YouTube
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