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(Bloomberg) — Singapore’s efforts to diversify its energy sources are paying off as war in the Middle East pushes up prices, but the government is still ready to act if needed, said Alvin Tan, Minister of State for Trade & Industry and National Development.
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“We are monitoring the situation in the Middle East very carefully and we will step in to support households and businesses if necessary,” Tan said in an interview with Bloomberg TV’s Haslinda Amin. “Singapore is an open economy so we import the vast majority of our energy, and energy is an existential issue for Singapore.”
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Singapore is among countries vulnerable to supply chain shocks from the Iran war as an import-dependent, trade-driven economy. Surging oil prices from the war’s disruption of energy markets, especially over a prolonged period, could feed into higher prices of everything from airfares to plastics.
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Over the past few years, Singapore has been moving to diversify its energy sources, including through emerging technologies like nuclear power and solar energy, Tan said. The government also announced rebates for households’ utilities expenses in the 2026 budget.
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“We have measures in place for short-term shocks but more importantly, we have long-term plans to refresh our economic strategy,” he said.
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Tan said it was too early to see if Singapore was benefiting from capital shifting from the Middle East as a result of the US and Israeli war on Iran, but that recent years had seen the city-state attract inflows.
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“Capital flows as well as fixed assets into Singapore have been growing,” Tan said. “The key part is to make sure Singapore remains open, connected, as well as stable so that investments can come.”
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On trade, Tan said Singapore is in talks with the US over disputed data on the two countries’ commerce.
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On Thursday, the city-state said it ran a trade deficit with the US in 2024, disputing figures from Washington that showed the city-state posted a surplus.
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Singapore’s statement came after the Office of the US Trade Representative announced this week that it had launched investigations under Section 301 of the Trade Act of 1974 into the acts, policies and practices of 16 economies, including Singapore. The probes, focused on structural excess capacity and production in manufacturing sectors, suggested that Singapore is contributing to global manufacturing overcapacity.
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“I doubt that the trading relationship between the US and Singapore will be affected,” said Tan. “We have a strong trading relationship. Our officials speak to each other. We are a phone call away. Where there is miscommunication, we’re quick to be able to clarify or seek clarification.”
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—With assistance from Yi Wei Wong and Anand Menon.
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English (US)