Tensions in the Middle East will affect energy prices and impact countries far away, like Singapore: SM Lee

SINGAPORE: The tensions in the Middle East will affect energy prices and impact countries far away, such as Singapore, Senior Minister Lee Hsien Loong said on Saturday (Feb 28).

“Today, Israel and the US together attacked Iran, jointly. The war has begun, Iran has struck back," he said, adding that it would be hard to tell how the war would end.

For weeks, tensions between the US and Iran have been building up, and the US has assembled a “huge military force” in the Middle East, he said.

Mr Lee also pointed to the tariffs imposed by the US administration, which in the past week were ruled illegal by the US Supreme Court.

The US administration invoked another instrument to impose a flat 10 per cent tariff on all countries, and US President Donald Trump changed his mind within a day and raised this to 15 per cent. However, the official US rate is currently still 10 per cent.

“So we are relieved, but I think we have to walk very carefully, and we just have to be prepared that many more changes can happen,” said the senior minister.

The overall climate of uncertainty created by these “dramatic twists and turns” will dampen the global mood for trade and investment, he added.

“Because businesses and companies will find it impossible to plan for what will happen tomorrow, what they can rely on, where they can safely invest, what they should do in order to make sure that the company will be okay day after day.

"And this is going to affect us too. As a small and open economy, we rely on global trade and investment."

Mr Lee, who is a Member of Parliament for Ang Mo Kio Group Representation Constituency, was speaking to a crowd of over 1,200 residents at a Chinese New Year celebration dinner at Teck Ghee Community Club. 

He is also an adviser to Ang Mo Kio GRC grassroots organisation.

HELPING SINGAPOREANS

The government will help Singaporeans prepare themselves.

“We can't tell what will happen in the world. We can't help what will happen in the world, but we can make sure that within Singapore, we prepare ourselves and we make the best of whatever situation comes,” he said.

He added that the government will do its part and that Prime Minister Lawrence Wong had announced measures in his Budget statement to help businesses, workers, households, the elderly and the vulnerable.

He noted that there will be continued support for households to cope with the cost of living.

This includes the new cost-of-living special payment of between S$200 (US$158) and S$400 for eligible Singaporeans, S$500 in CDC vouchers next January, and more generous U-Save rebates.

Mr Lee noted that Singapore’s economy performed “much better" than expected last year. The country’s gross domestic product grew 5 per cent in 2025, beating expectations.

People cannot afford to take any of this for granted, Mr Lee said, adding that the world remains very uncertain.

The government is putting in a lot of resources to strengthen the economy, especially to encourage and support Singaporean workers in learning how to use artificial intelligence, he said.

“We each have to play a part too, to continue to upgrade ourselves, learn new skills like AI. Our companies have to upgrade themselves, reinvent and transform their businesses to stay competitive."  

He added that he hopes everyone will make use of the support through the various programmes and work together to take advantage of these opportunities.

This way, Singapore can overcome the challenges to build a brighter future.