Singapore’s Hormuz Risks – OpEd |
The Middle East conflict between Iran and its Arab neighbours has been dominating global attention. Attention is focused primarily on the competing interests of Iran, the Gulf states and Western powers vying for position and influence. Yet from Singapore’s perspective, there is another crucial player and location in the saga unfolding: the strategically located Strait of Hormuz, through which a third of global energy supplies are consumed by Europe and Asia in their original form. Its security issues cannot be ignored for much longer.
With supply lines under pressure, Singapore faces two threats: a sharp rise in the cost of imported energy and industrial materials, threatening the economic recovery; and a stern test of the 1982 United Nations Convention on the Law of the Sea, specifically the rules for transit passage that Singapore respects scrupulously. To date, it has declined Iran’s offers to arrange safe passage for vessels carrying fuel, a decision consistent with its usual approach to the law of the sea.
Singapore is not geographically close to the Gulf, but Gulf instability matters to the city-state. A significant proportion of Singapore’s oil imports, and indeed its gas supplies, come from the Middle East. Almost all of these supplies transit through the Strait of Hormuz and its approaches. As a result, any disturbance, whether military or through-proxy, or even simple harassment of commercial vessels, that affects the Straits is likely to have very rapid and significant repercussions for the country’s refining and related petrochemical sectors, given its position as the world’s leading energy trading centre. The lack of strategic reserves and the absence of alternative supplies other than by sea expose the country to serious and embedded risk, for the economy as well as the security of its people.
It seems that the threat itself is escalating the exposure. Iran is selecting the moment to attack, and almost by definition chooses not to go to war. That means that its assault on commercial shipping creates uncertainty, without immediately translating into increased risk of war. This in turn increases the uncertainty for Singapore, and could increase insurance premiums, introduce delays in the arrival of tankers and raise oil prices. Inflation would increase, and businesses could face higher costs. Investors would be turned off, and the outlook would deteriorate gradually.
Asia’s patchy response to the coming energy crunch will further complicate the issue, as the region consumes over half the world’s energy but lacks a meaningful energy security strategy. It has no unified approach to dealing with supply disruptions, no integrated system for monitoring and protecting its vital oil shipping lanes, no shared maritime security strategy for the region’s busy waterways, and no common position on the brewing Gulf crisis. Each country will have to chart its own uncertain course, with some countries reportedly already negotiating with Iran to use its territory as a transit point.
Unlike the Hormuz situation, where the US is reportedly threatening to negotiate terms of transit with Saudi Arabia and other Gulf States, Singapore has been clear that it will not entertain any form of negotiations with Malaysia on transit passage through the Straits of Malacca and Singapore. Singapore, after all, is a signatory to the Convention on the Law of the Sea (UNCLOS), which enshrines transit passage as a legal right, not a matter of concession. Given the strategic significance of the Straits — narrower and more congested than Hormuz but carrying much greater volumes of oil — weakening the principle of free transit could have far-reaching consequences. To allow passage to be subject to negotiation, restriction or raking off through ‘tolls’ would be to take an unacceptable risk for Singapore.
Foreign Minister Vivian Balakrishnan reiterated at the Singapore Maritime Review Conference that transit passage through international shipping routes, as codified under UNCLOS, is a fundamental right of states to maintain global trade. To undermine transit passage in one region of the world would undermine it everywhere. Given Singapore’s vulnerability as a small state heavily dependent on trade, it is a matter of national security.
The ongoing Hormuz crisis may soon be less about oil supplies and more about the state of the global maritime order, with faltering “rules of the road” exacting a particularly steep price on countries that depend on the lengthy sea lanes. For a trade-reliant city-state like Singapore, a breakdown in such critical areas would likely be especially pernicious.
Even as the industry strives to stick to its principles, there are no guarantees that the unpredictability of the world will cease to affect it. While the volatility of global commodity prices, shocks to supply, and geological events such as natural disasters are issues that no country can insulate itself from, in our case, Singapore is particularly sensitive to oil price movements. The global energy transition will also present novel and unforeseen challenges, while Asia’s hydrocarbon demand is set to stay high for many decades to come, entrenching the country’s Middle East supply routes for the long-term.
While significant headway has been made in addressing concerns around oil price volatility and physical security risks at source, there remains much work to be done. Diversifying the mix of suppliers and enhancing strategic supply reserves are two of the key levers that need to be pulled in this respect. For instance, ensuring that LNG supplies from places other than the Middle East and South Asia are prioritised, as well as pushing for greater interconnectivity among nations in the region, must feature heavily in plans to secure supplies in the years to come. It is interesting to note that while near-term needs will be focused on maximising use of established energy sources, there remains ample scope for contemplation regarding the longer-term possibilities that alternative fuels may present – be it the much-hyped potential of hydrogen or the more proven offering of ammonia.
Enhancing cooperation among Asian navies in the pursuit of enhanced maritime security is a critical endeavour. Encouraging sustained and cooperative intelligence sharing, patrols, and joint maritime training with regional and additional navies would be critical towards ensuring the security of vital energy transport routes. Moreover, Singapore should utilise its influential position to actively pursue the development of a coordinated Asian framework for energy security, given the current disparity between fragmented national strategies and wide-ranging risks at stake.
Long-term structural resilience to these risks will likely require innovation in the form of improvements to energy storage, grid management, and carbon capture to reduce the reliance on long supply chains in the medium term, short of complete self-sufficiency.
The Strait of Hormuz, a mere 82 kilometres wide at its narrowest point, is a global crossroads for oil traffic. For Singapore, keeping the world’s oil pipes flowing and enforcing maritime rules is essential to its survival. But both are now under threat.
While many are expecting the next global energy crisis to emanate from Asia, it is more likely to occur elsewhere and affect Asia first. This would naturally mean that Singapore would be one of the first countries to feel the pinch, so the question really is, are we ready?
Simon Hutagalung is a retired Indonesian diplomat. His views are his own.
Gross, S. (2026, April 1). The Iran conflict’s energy shocks are not yet fully realised. Brookings Institution. https://www.brookings.edu/articles/the-iran-conflicts-energy-shocks-are-not-yet-fully-realized/
Kurlantzick, J., & Richter, A. (2026). The Iran war has reshaped Asia’s energy security strategies. Council on Foreign Relations. https://www.cfr.org/articles/the-iran-war-is-reshaping-asias-energy-security-strategies