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When Iranian and Russian warships manoeuvre in the Sea of Oman on February 19, the images will likely be framed in Washington and Tehran as a story about great-power posturing, nuclear diplomacy, and the enduring contest over the Strait of Hormuz. For Singapore, however, those same images tell a different and more intimate story — one about crude oil tanker routes, refinery throughput, bunkering revenues, and the extraordinary fragility that underlies the city-state’s prosperity when the world’s most important maritime chokepoint is under duress.
This is not a distant geopolitical drama. It is, in a very material sense, Singapore’s problem too.
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The Strait That Feeds the Island
Singapore imports virtually all of its energy. The city-state has no domestic oil reserves, no natural gas fields, and no coal mines. What it has, instead, is geography — a position at the southern terminus of the Malacca Strait through which flows roughly one-third of global trade by weight — and an extraordinary industrial infrastructure built to transform raw crude into refined products for export across Asia.
At the centre of that infrastructure is a dependency that Singapore rarely advertises: the Strait of Hormuz. Singapore ranks among the world’s top ten importers of crude oil transiting the strait, alongside China, India, Japan, South Korea, Taiwan, and the Netherlands. The country imported approximately 836,500 barrels per day of crude oil as of late 2024, a substantial proportion of which originates from Gulf producers — Saudi Arabia, the UAE, Iraq, Kuwait — whose exports almost exclusively pass through the Hormuz corridor.
The numbers defining that corridor are staggering in their own right. In 2024, oil flows through the strait averaged 20 million barrels per day, equivalent to roughly one-fifth of global petroleum liquids consumption. Around 84 percent of crude and condensate moving through Hormuz was destined for Asian markets. Approximately one-fifth of global liquefied natural gas trade, primarily from Qatar, also transited the strait. These are not marginal flows that can be easily replaced. As the U.S. Energy Information Administration noted in its most recent assessment, most volumes transiting Hormuz have no practical alternative means of exiting the Persian Gulf if the strait is closed.
For Singapore, a Hormuz disruption would not merely raise petrol prices. It would strike at the very engine of the economy.
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The Refinery Hub at Stake
Singapore is the fifth-largest refining and petroleum export hub in the world, processing crude oil from the Gulf and redistributing refined products — jet fuel, diesel, naphtha, fuel oil — across the entire Asia-Pacific. The Jurong Island petrochemical complex, which generates a disproportionate share of Singapore’s industrial output and export earnings, runs on a steady diet of Middle Eastern crude. An interruption to that supply, whether through a physical blockade, a sustained spike in war-risk insurance premiums, or a rerouting of tanker traffic, would reverberate through every downstream sector of the Singapore economy.
The bunkering industry compounds this exposure. Singapore is consistently the world’s largest bunkering port, supplying marine fuel to the tens of thousands of vessels that call or transit annually. Disruption to Middle Eastern energy flows would not only reduce the volume of crude available for refining; it would drive up the cost of the bunker fuel on which that entire ecosystem depends.
And there is a further, subtler dimension. Analysts tracking Iranian-linked tanker movements in January 2026 identified a significant concentration of vessels — carrying between 166 and 170 million barrels of Iranian crude and condensate in floating storage — anchored near Singapore and Malaysia, where ship-to-ship transfer operations facilitate the onward movement of sanctioned oil to end buyers, primarily in China. Singapore’s waters, intentionally or not, have become a barometer of Persian Gulf geopolitical stress. When Iranian tanker clusters near the island grow, it signals congestion and uncertainty in the global crude supply system. When they thin, the system is clearing. The city-state is, in this sense, already embedded in the Iran-US energy standoff whether it wishes to be or not.
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What the Drills Signal
The joint Iran-Russia naval exercises announced for February 19 must be read against the backdrop of a broader strategic realignment that accelerated after the 12-day Israel-Iran war of June 2025 — a conflict that briefly drew in the United States and fundamentally altered the regional military calculus. Iran lost significant conventional military infrastructure in that campaign. Its missile arsenal, though reportedly reconstituting with external assistance, was degraded. What Tehran retains, however, is the ability to threaten the Strait of Hormuz — a capability it demonstrated on February 16 by conducting Revolutionary Guard exercises in the strait itself, and on February 17 by announcing a partial, temporary closure for its own security drills.
Russia’s participation in the Sea of Oman exercises is not merely symbolic military camaraderie. It represents a deliberate signal by Moscow — still operating under extensive Western sanctions and anxious to demonstrate strategic relevance beyond the European theatre — that it retains the capacity and willingness to complicate Western naval dominance in the region. The United States, for its part, has deployed what President Trump has described as an “armada” to the Persian Gulf, a posture intended to deter Iranian adventurism while simultaneously lending credibility to the Geneva nuclear negotiations brokered by Oman.
The resulting configuration is a complex and volatile one: simultaneous diplomatic engagement and military signalling, with the world’s most important energy chokepoint as the stage. For small, open economies like Singapore, this configuration presents a specific category of risk — one defined not by the likelihood of the worst case, but by the costs of even a partial or temporary disruption.
Geopolitical risk analysts have identified the Hormuz-Bab-el-Mandeb corridor as among the highest-priority flashpoints for 2026, noting that the dominant threat is not necessarily a dramatic closure but rather a persistent and costly unreliability. Insurers price that uncertainty. Tanker operators route around it where they can. The result is elevated shipping costs, longer transit times, and compressed margins throughout the supply chain — all of which eventually show up in Singapore’s import bills, refinery margins, and consumer prices.
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A Double-Edged Exposure
Singapore’s relationship to Hormuz risk is not, however, purely one of vulnerability. As the world’s fifth-largest refinery hub, Singapore also benefits when global oil prices rise. Higher crude prices translate into higher export values for the refined products flowing out of Jurong Island, and Singapore’s position as an entrepôt for petroleum products means it captures a share of the price premium that disruption generates. DBS analysts have previously noted that Singapore’s oil and petrochemical export values tend to benefit from elevated global oil prices, partly offsetting the negative pass-through to inflation and shipping costs.
This duality means that Singapore’s policymakers face a calibration challenge rather than a simple adversarial relationship with Persian Gulf instability. The city-state wants stable, predictable energy flows — but not necessarily oil prices so low that they erode the margins of its refining and petrochemical industries. What it cannot afford, and what the current Iran-Russia axis raises as a genuine risk, is acute supply shock: a sudden, severe constriction of Hormuz throughput that overwhelms price adjustments with physical scarcity.
The IEA requires its member states to maintain emergency oil stockpiles equivalent to 90 days of import consumption precisely to buffer against such scenarios. Singapore, though not an IEA member, maintains strategic petroleum reserves as a matter of longstanding policy. How large those reserves are is not publicly disclosed. How adequate they would prove in a sustained Hormuz disruption remains an open question.
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The Malacca Dimension
There is a second chokepoint in this story that rarely receives the attention it deserves. The Strait of Malacca — the narrow passage between Malaysia, Indonesia, and Singapore through which more than one-third of global trade by weight passes — is both Singapore’s greatest geographic asset and a potential vector for the amplification of Persian Gulf disruptions.
If Hormuz were disrupted, tankers rerouting via alternative passages would add significant voyage time and cost, but the volumes involved would ultimately need to reach Asian refiners by some path. In some scenarios, rerouted cargoes could actually increase traffic through the Malacca Strait, benefiting Singapore’s bunkering and port operations. In other scenarios — particularly if US-China tensions, already elevated in 2025 by tariff escalations and reciprocal port fees — complicate access to Malacca for certain vessel classes, the multiplier effects could turn negative quickly.
The concurrent deterioration in Southeast Asian maritime security is a related concern. Piracy incidents in the region reportedly jumped from 21 in the first half of 2024 to 80 in the same period of 2025. While most incidents remain opportunistic, the trend reflects broader instability in regional waters at precisely the moment when elevated geopolitical risk is stretching maritime security resources globally.
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Singapore’s Strategic Calculus
Against this landscape, Singapore’s foreign policy posture becomes both more legible and more precarious. The city-state has always navigated great-power competition through a combination of institutional multilateralism — its active participation in ASEAN, the UN, and other forums — and careful hedging that avoids formal alignment with any single great power. It has defence arrangements with the United States, extensive economic ties with China, and deep trade relationships with the Gulf states.
The Iran-Russia military relationship complicates that triangulation. If US-Iran diplomatic engagement in Geneva yields a durable nuclear framework — and Iranian officials struck an unusually optimistic tone after the February 17 round of talks — the risk of a Hormuz closure would recede materially, to Singapore’s considerable relief. If those negotiations collapse, as previous rounds did following the Israeli strikes of June 2025, the escalation ladder runs upward in ways that become progressively more difficult for neutral parties to manage.
Singapore has no leverage over that outcome. What it has is a set of structural exposures — in energy supply, in refinery economics, in bunkering revenues, in port throughput — that make the outcome of talks happening in a Swiss city, mediated by an Omani diplomat, consequential to the daily economic lives of its residents.
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The Arithmetic of Vulnerability
The final and perhaps most sobering dimension of Singapore’s exposure is how thin the margins of the global energy system have become. The IEA’s June 2025 Hormuz Factsheet documented that flows through the strait in the first five months of 2025 remained stable despite Iranian threats. Oil prices, after a brief spike following the Israel-Iran war, stabilised below 70 dollars a barrel following the ceasefire. Markets, in other words, absorbed the geopolitical shock with reasonable composure.
But that composure rests on specific structural conditions: spare production capacity outside the Gulf, functioning pipeline bypass routes in Saudi Arabia and the UAE, and the credible threat of coordinated strategic reserve releases by the IEA and its allies. These conditions are not guaranteed to persist in a scenario of sustained escalation, especially one in which Russia — itself a major oil exporter navigating a complex relationship with both Iran and the West — is an active participant in the military signalling.
For Singapore, the arithmetic is straightforward if uncomfortable. The city-state sits downstream of a chokepoint it cannot control, at the end of a supply chain it did not design, in a geopolitical environment shaped by great powers whose interests are rarely coterminous with those of small, open economies. The Iran-Russia drills of February 19 will not, in all likelihood, alter that arithmetic today. But they are a reminder that the arithmetic exists — and that the margin for error, in a world of simultaneous diplomatic engagement and military provocation, is narrower than it has been for some time.
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This feature draws on reporting from the Straits Times, analysis from the U.S. Energy Information Administration, the International Energy Agency, and research from DBS Bank, Allianz Trade, EBC Financial Group, and the Kpler commodity intelligence platform.