An in-depth analysis of how renewed negotiations between Tehran and Washington could reshape Southeast Asia’s strategic landscape
Introduction
The renewed nuclear negotiations between Iran and the United States represent a critical juncture not just for Middle Eastern geopolitics, but for Singapore and the broader Southeast Asian region. As these bilateral talks progress—with a second round scheduled for Geneva on February 17, 2026—the outcome will have far-reaching consequences for Singapore’s energy security, trade relationships, and role as a regional financial hub.
Singapore’s position as a small, trade-dependent nation with no natural resources makes it particularly vulnerable to shifts in global energy markets and geopolitical stability. The Iran-US negotiations, which now explicitly include potential energy deals and economic cooperation, warrant careful examination from a Singaporean perspective.
Energy Security Implications
Oil Market Volatility and Pricing
Singapore’s economy is highly sensitive to global oil price fluctuations. As a major oil refining and trading hub in Asia, the city-state processes approximately 1.5 million barrels per day, despite having no domestic oil production. The negotiations between Iran and the US directly impact Singapore’s energy security in several ways.
Searched the web
Singapore oil refining capacity 2025 2026
10 results
Singapore
www.eia.gov
List of oil refineries – Wikipedia
en.wikipedia.org
Singapore Oil Refinery Capacities (Yearly) – Historical Dat…
ycharts.com
15 Countries With The Largest Refining Capacity
finance.yahoo.com
Oil industry in Singapore – Wikipedia
en.wikipedia.org
Top 10 Oil and Gas Companies in Singapore (2025)
www.blackridgeresearch.com
Our operations | ExxonMobil Singapore
corporate.exxonmobil.com
Outlook on global refining to 2028 August 2024 www.eia.gov
www.eia.gov
Energy Resource Guide – Singapore – Oil and Gas
www.trade.gov
Singapore – Countries & Regions – IEA
www.iea.org
Done
Singapore is described as the undisputed oil hub in Asia, with the oil industry responsible for approximately five percent of the country’s GDP Wikipedia. The city-state’s strategic position becomes particularly significant given the current negotiations.
Iranian Oil and Asian Markets
Searched the web
Iran oil exports China 2025 2026
10 results
China’s Dependence on Iranian Oil: Strategic Leverage and Exposure – Modern Diplomacy
moderndiplomacy.eu
Iran Exports to China – 2026 Data 2027 Forecast 1997-2022 Historical
tradingeconomics.com
Iran’s Oil Output Faces a New Test After Venezuela | OilPrice.com
oilprice.com
Iran’s Petroleum Exports to China and U.S. Sanctions | Congress.gov | Library of Congress
www.congress.gov
Iranian oil will make up for China’s loss of Venezuelan supply – Reuters | Iran International
www.iranintl.com
Why China Isn’t Worried About New US Sanctions on Iran
thediplomat.com
China’s Exposure to Iran Oil Disruption Seen as Limited | Energy Intelligence
www.energyintel.com
November 2025 Iran Tanker Tracker | UANI
www.unitedagainstnucleariran.com
Iran crude piles up at sea as Chinese demand slows, Kpler data show | Iran International
www.iranintl.com
Report on Iranian Petroleum and Petroleum Products Exports
www.eia.gov
Done
According to the article, the US is working to reduce Iran’s oil exports to China, which account for more than 80 percent of Iran’s oil exports. China has emerged as the largest buyer of Iranian crude, importing approximately 1.38 million barrels per day in 2025, representing roughly 13-14 percent of China’s total seaborne crude imports Modern Diplomacy.
If the negotiations succeed and sanctions are lifted, a legitimate Iranian oil supply could stabilize global markets. Conversely, failure and potential military action could disrupt critical shipping lanes through the Strait of Hormuz, affecting Singapore’s refineries that depend on Middle Eastern crude.
Singapore’s Refining Complex Vulnerability
ExxonMobil’s Singapore refinery has a combined capacity of 592,000 barrels per day across two sites, representing one of the company’s largest refineries globally Blackridge ResearchExxonMobil. Any disruption to crude oil supplies from the Middle East—whether through conflict or shifting trade patterns following a US-Iran deal—would directly impact these operations.
Financial Hub and Sanctions Compliance
Singapore as a Regional Trading Center
Singapore provides 25 to 35 percent of commodities trading in Asia and serves as Asia’s largest physical oil trading hub Wikipedia. The Iran-US negotiations carry significant implications for Singapore’s financial sector, particularly regarding sanctions compliance and trade finance.
Searched the web
Singapore financial sanctions compliance Iran 2025
10 results
Targeted Financial Sanctions
www.mas.gov.sg
A Complete Guide to Singapore’s Sanctions List | sanctions.io
www.sanctions.io
Sanctions compliance and Singapore listing rules: Risks beyond Singapore sanctions
www.hoganlovells.com
Mitigating The Unique Sanctions Risks Of Singaporean Trade | Publications | Kirkland & Ellis LLP
www.kirkland.com
Singapore company fined over US$12m for alleged US sanctions violations | Global law firm | Norton Rose Fulbright
www.nortonrosefulbright.com
SANCTIONS ADVISORY – Guidance for Shipping and …
ofac.treasury.gov
Singapore | Global Sanctions
globalsanctions.com
Secretary Bessent Announces Sanctions Against Architects of Iran’s Brutal Crackdown on Peaceful Protests | U.S. Department of the Treasury
home.treasury.gov
Iran’s Regime Sophisticated Playbook to Circumvent Global Sanctions – NCRI
www.ncr-iran.org
October 2025 Sanctions and Export Controls Update – Institute for Financial Integrity
finintegrity.org
Done
Singapore implements UN-mandated targeted financial sanctions through the United Nations Act 2001, with regulations prohibiting persons in Singapore from dealing with designated individuals and entities related to Iran Monetary Authority of Singapore. However, Singapore faces increasing scrutiny from US authorities regarding Iran-related transactions.
In March 2025, a Singapore-based shipping firm was sanctioned by the US for allegedly transporting oil to Iran, following earlier sanctions in May 2024 against another Singaporean shipping firm Hogan Lovells. According to the US Financial Crimes Enforcement Network, Tehran relies on shadow banking networks connected through the UAE, Hong Kong, and Singapore Finintegrity.
Implications for Singapore’s Financial Sector
If the Iran-US negotiations succeed and sanctions are lifted, Singapore’s financial institutions would benefit from:
- Increased Trade Finance Opportunities: Legitimate Iranian oil trade could flow through Singapore’s banking system, expanding business for trade finance divisions.
- Reduced Compliance Burdens: Banks would no longer need extensive due diligence to avoid inadvertent Iran-related transactions.
- Enhanced Regional Connectivity: Singapore could serve as a financial bridge between Iran and Asian markets.
Conversely, if negotiations fail and the US intensifies sanctions enforcement, Singapore faces:
- Heightened Regulatory Risk: More aggressive US enforcement could target Singapore entities inadvertently involved in sanctions evasion networks.
- Banking Sector Vulnerability: Financial institutions may face reputational damage or penalties if caught in Iran-related transactions.
- Competitive Disadvantage: Overly cautious compliance could push business to less regulated jurisdictions.
Regional Security and Stability
Strait of Malacca and Maritime Security
Searched the web
Strait Malacca ship to ship transfers Iranian oil Malaysia 2025
10 results
Malaysia Must Stop Enabling Iran’s Sanctions Evasion
thediplomat.com
The Clandestine Oil Shipping Hub Funneling Iranian Crude to China
www.bloomberg.com
Malaysia Lets Tankers in Iran-China STS Oil Transfer Off with a Fine
maritime-executive.com
Ghost fleets: Meet the guy tracking illicit oil tankers from his Singapore rooftop | CNN
us.cnn.com
Malaysia releases tankers suspected of illegal crude transfers
www.seatrade-maritime.com
Malacca Strait News – MarineLink
www.marinelink.com
November 2025 Iran Tanker Tracker | UANI
www.unitedagainstnucleariran.com
Sanctioning Entities That Have Traded in Iran’s Petroleum – United States Department of State
www.state.gov
Security risks impacting global shipping – Nov 2025
www.iss-shipping.com
Malaysia detains two tankers, seizes oil cargo
theins.ru
Done
The waters off Malaysia have been the site of more than 500 illicit ship-to-ship transfers involving Iranian oil since the start of 2025 The Diplomat. These operations occur near the Strait of Malacca, one of the world’s most critical shipping chokepoints, directly adjacent to Singapore.
Singapore-based maritime service provider Strasselink provided pilotage services to Iranian tankers on 13 occasions while carrying Iranian crude oil through the Straits of Malacca between January and August 2025 U.S. Department of State, leading to US sanctions. This illustrates how Singapore’s proximity to illicit oil transfer operations creates both security risks and regulatory exposure.
Security Implications
The outcome of the Iran-US negotiations will significantly affect maritime security in waters adjacent to Singapore:
Scenario 1: Successful Negotiations
- Reduced shadow fleet activity in regional waters
- Improved maritime safety as Iranian vessels return to legitimate shipping practices
- Decreased environmental risks from aging, poorly maintained tankers
- Easier enforcement of maritime regulations
Scenario 2: Failed Negotiations and Military Action
- Increased threat to shipping through the Strait of Hormuz, affecting global oil flows
- Potential for spillover conflict in Southeast Asian waters
- Heightened insurance premiums for vessels operating in the region
- Greater strain on regional maritime enforcement agencies
Trade Relationship Dynamics
Singapore-Iran Trade
Searched the web
Singapore Iran trade relationship 2025
10 results
Iran (IRN) and Singapore (SGP) Trade | The Observatory of Economic Complexity
oec.world
Singapore Exports to Iran – 2025 Data 2026 Forecast 1989- …
tradingeconomics.com
Singapore Imports from Iran – 2024 Data 2025 Forecast 1989-2022 Historical
tradingeconomics.com
Singapore (SGP) and Iran (IRN) Trade | The Observatory of Economic Complexity
oec.world
Iran-Singapore Relations | FinancialTribune
financialtribune.com
Sanctioning Entities That Have Traded in Iran’s Petroleum – United States Department of State
www.state.gov
ASIA-PACIFIC TRADE AND INVESTMENT TRENDS 2024/ …
repository.unescap.org
Singapore Shipping Firm Hit by US Sanctions Over Iran Oil Links – Bloomberg
www.bloomberg.com
Sanctions on Iran’s Oil Network to Further Impose Maximum Pressure on Iran – U.S. Embassy in Singapore
sg.usembassy.gov
Foreign relations of Singapore – Wikipedia
en.wikipedia.org
Done
Direct trade between Singapore and Iran has been minimal in recent years due to sanctions. In 2023, Singapore exported only $10 million to Iran, primarily orthopedic appliances, packaged medicaments, and air pumps, representing a dramatic decrease from $1.1 billion in 2018 The Observatory of Economic Complexity.
However, Singapore’s exposure to Iran-related commerce extends far beyond direct bilateral trade. The city-state’s role as a shipping, financial, and oil trading hub means it is inadvertently entangled in the sanctions evasion ecosystem. In March 2025, Singapore-based company Shipload Maritime was sanctioned by the US for knowingly engaging in significant transactions for the transport of Iranian petroleum Bloomberg.
Post-Negotiation Trade Scenarios
If sanctions are lifted following successful negotiations, Singapore could benefit from:
- Direct Trade Opportunities: Legitimate trade in machinery, technology, and pharmaceuticals could resume.
- Re-export Hub: Singapore could serve as a regional distribution center for Iranian goods, particularly petrochemicals and refined products.
- Business Services: Legal, accounting, and consulting firms could provide services to facilitate Iran’s reintegration into global commerce.
- Technology Transfer: Singapore’s advanced manufacturing and technology sectors could engage in joint ventures with Iranian counterparts.
Economic Diversification and Aircraft Deals
The article mentions that potential agreements include aircraft purchases. This is particularly relevant to Singapore given its aviation industry.
Searched the web
Singapore aviation industry aircraft manufacturing 2025
10 results
Industry Preview of Aerospace ITM 2025 by EDB | Association of Aerospace Industries (Singapore)
aais.org.sg
Aerospace Industry Singapore – Leading Aerospace Hub | EDB Singapore
www.edb.gov.sg
Singapore – Aerospace and Defense
www.trade.gov
Commercial Aircraft Market in Singapore Growth Analysis – Size and Forecast 2025-2029 | Technavio | Technavio
www.technavio.com
Association of Aerospace Industries (Singapore) | The Association of Aerospace Industries (Singapore) or AAIS, is a not-for-profit, member-based organisation established in 2003, to promote the development of Singapore as a leading aerospace hub.
aais.org.sg
Singapore Aerospace Programme
www.a-star.edu.sg
Aerospace Singapore Digital
aerospace.sg
Singapore – Aerospace
www.trade.gov
Singapore Aerospace And Defense Market Size, Trends, Forecast Report 2030
www.mordorintelligence.com
Aviation and Aerospace industry – Singapore
www.moe.gov.sg
Done
Singapore’s aerospace and defense industry has an estimated market size of approximately $8 billion in 2024 and is expected to double by the end of the decade with a projected compound annual growth rate of more than 12 percent International Trade Administration. Singapore plays host to aftermarket activities including aerospace parts distribution and management and aircraft leasing, with a world-class airport and strategic location in Asia EDB.
While Singapore doesn’t manufacture complete aircraft, its aerospace ecosystem—particularly in maintenance, repair, and overhaul (MRO) services and aerospace parts—positions it to potentially benefit indirectly from aircraft deals between Iran and Western manufacturers. If Iran purchases Boeing or Airbus aircraft as part of the negotiations, Singapore’s MRO facilities could service these aircraft, and its parts distribution networks could supply the Iranian aviation sector.
Policy Recommendations for Singapore
Based on this analysis, Singapore should consider the following strategic responses to the Iran-US negotiations:
Short-Term Measures
Enhanced Sanctions Compliance
- Strengthen financial institution screening mechanisms to prevent inadvertent Iran-related transactions
- Provide clearer guidance to maritime service providers about US sanctions requirements
- Increase cooperation with Malaysian authorities to address ship-to-ship transfer operations in regional waters
Risk Assessment
- Conduct stress testing on oil supply disruptions scenarios
- Review exposure of Singapore-based companies to Iran-related commerce
- Enhance maritime domain awareness in the Singapore Strait
Medium-Term Preparations
If Negotiations Succeed
- Prepare legal and regulatory frameworks for resumption of legitimate Iran trade
- Position Singapore as a trusted intermediary for Iran’s reintegration into global commerce
- Develop trade finance mechanisms that satisfy both US requirements and Iranian needs
If Negotiations Fail
- Diversify crude oil sources to reduce dependence on Middle Eastern supplies
- Strengthen strategic petroleum reserves
- Enhance maritime security cooperation with regional partners
- Prepare contingency plans for Strait of Hormuz disruptions
Long-Term Strategic Positioning
Energy Transition Acceleration
- Accelerate investments in renewable energy and alternative fuel sources
- Reduce structural dependence on oil refining and trading
- Position Singapore as a clean energy hub rather than solely a petroleum hub
Regional Leadership
- Strengthen ASEAN coordination on sanctions compliance and maritime security
- Advocate for rules-based international order in energy trade
- Enhance Singapore’s role as a neutral mediator in international disputes
Conclusion
The Iran-US nuclear negotiations represent a pivotal moment with profound implications for Singapore. As a small, trade-dependent nation that serves as Asia’s premier oil trading hub, Singapore faces both significant risks and potential opportunities depending on the outcome.
A successful agreement could normalize Iranian oil flows, stabilize global energy markets, reduce shadow fleet activity in Southeast Asian waters, and create legitimate trade opportunities. However, it would also intensify competition in oil trading and refining as Iranian supply returns to the market through official channels.
Conversely, failed negotiations and potential military conflict would threaten Singapore’s energy security through potential disruptions to the Strait of Hormuz, increase maritime security risks in regional waters, raise insurance and shipping costs, and intensify US sanctions enforcement pressure on Singapore entities.
Singapore’s response must be multifaceted: maintaining strict sanctions compliance while preparing for either outcome, strengthening regional security cooperation, diversifying energy sources, and positioning the city-state to serve as a trusted intermediary should sanctions be lifted. The negotiations underscore Singapore’s perpetual challenge as a small nation navigating great power competition—maintaining relationships with both the US and regional partners while protecting its economic interests and strategic autonomy.
Ultimately, regardless of the negotiation outcome, Singapore must continue its long-term transition away from dependence on Middle Eastern oil, accelerate its clean energy transition, and strengthen its role as a rules-based financial and trading hub that can navigate complex geopolitical terrain while maintaining its reputation for integrity and compliance with international norms.