15/04/2026

BIZ & FINANCE WEDNESDAY | APR 15, 2026

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Singapore central bank tightens policy as Iran war lifts inflation risks SINGAPORE: Singapore’s central bank tightened its monetary policy settings yesterday, flagging the risk that an Iran war-fuelled energy shock could push up core inflation even as mounting pressure on growth was underscored by a first quarter economic contraction. The Middle East conflict has upended global growth and inflation trajectories, throwing interest-rate expectations into disarray. As a small trade-dependent hub, Singapore is especially vulnerable to supply-chain disruptions and volatile energy prices. The Monetary Authority of Singapore (MAS) said it would increase slightly the rate of appreciation of the S$NEER policy band, in line with what most analysts polled by Reuters had expected. MAS said there would be no change to its width and the level at which it is centred. “There are considerable risks around the outlook for inflation and growth,“ MAS said, adding that the Middle East situation “is evolving and remains highly uncertain.” “GDP growth in the Singapore economy will slow over the course of this year, while the output gap should average around 0%,“ the central bank said. Of the 13 analysts polled by Reuters ahead of the review, 11 expected the MAS to tighten policy due to the jump in energy prices after the Middle East war erupted late in February and heightened inflation risks. Two forecast no change. “As higher energy costs pass through supply chains worldwide, a broader range of Singapore’s import costs will increase,“ the central bank said. Maybank economist Chua Hak Bin said MAS appears to be leaving the door open for another move in the July meeting, depending on how inflation and growth evolve. “We think the Iran war may impact inflation more than growth, and cannot rule out another tightening move at the July meeting.” The Singapore dollar held broadly steady against the US dollar after the policy decision. The decision came at the same time as preliminary government data showed the economy grew 4.6% in the first quarter of 2026, weaker than market expectations of a 5.9% pace. On a quarter-on-quarter seasonally adjusted basis, GDP contracted 0.3% from the fourth quarter of 2025, according to the advance estimates. – Reuters

Iran’s Hormuz gamble brings lasting tension to Gulf energy

THE Iran war and the closure of the Strait of Hormuz have shattered a status quo that prevailed among Middle East oil and gas producers for decades. Even if the current, shaky ceasefire holds, the uneasy “new normal” has likely set the stage for yet another round of conflict. Tehran has now demonstrated both its ability and willingness to seal off the critical waterway and strike vital infrastructure across the region, fundamentally altering the risk calculus for its neighbours and jeopardizing Gulf countries’ long term oil and gas strategies. The six-week war laid bare deep tensions between the Islamic Republic and its key regional neighbours Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Iraq – all close US allies. They had long avoided direct confrontation with Tehran under a tacit understanding that war would devastate their shared economic interests. But that entente cordiale has now been blown apart. At the heart of the crisis lies the Strait of Hormuz. Iran closed the

Fighting between the US, Israel and Iran quickly spilled across borders as Iranian missiles and drones struck dozens of targets in neighbouring countries, including major oil and gas facilities across the Gulf. Around 11 million barrels per day of oil production and Qatar’s entire LNG output were forced offline – while refineries, export terminals and other critical installations suffered extensive damage. For Saudi Arabia, the world’s largest crude exporter and de facto leader of Opec, the implications are especially troubling. Even the alternative export route it painstakingly developed in recent decades to bypass Hormuz proved vulnerable. The kingdom’s East-West Pipeline, designed to divert roughly 7 million barrels per day from the eastern oil heartland to the Red Sea port of Yanbu, was hit within hours of the US-Iran ceasefire announcement. Saudi Arabia, which exported around 8 million bpd of oil before the war, said the attacks had cut its oil

waterway for the first time in history, trapping nearly a fifth of the world’s oil and gas supplies inside the Gulf, delivering a devastating shock to the region and the global economy. Even if shipping ultimately resumes, the unprecedented act marks a historic rupture. Iran has signalled that it wants to retain leverage over the strait under any future peace deal, floating the idea of controlling traffic and charging vessels a transit fee. US President Donald Trump has urged Tehran to fully reopen the waterway, and on Sunday said the US Navy would immediately start blockading the strait, raising the stakes after marathon talks with Iran failed to reach a deal to end the war. Yet even a formal reopening would do little to erase the lesson the war has taught Iran’s neighbours. The threat of Iran closing the strait – now proven feasible with limited military effort – is a genie that cannot be put back into the bottle. The war has sharply exposed how vulnerable the region’s energy infrastructure is.

production capacity by around 600,000 bpd and reduced throughput on the East-West Pipeline by about 700,000 bpd. At the same time, the UAE’s oil export pipeline to the port of Fujairah, which sits outside the strait, was also struck repeatedly. And for Qatar and Kuwait, the strait remains the sole export route. While this situation might look like a checkmate for Tehran, the Gulf is more apt to see it as an intolerable status quo that will need to be remedied. This new reality strikes at the core of the Gulf’s economic model – both now and in the future. For starters, the region faces years of reconstruction and instability that will strain development plans, even if the elevated geopolitical risk premium keeps energy prices higher. The long-term threat is even greater. The war has jolted many nations – particularly in Asia – into a painful reassessment of energy import dependence. For the Gulf, that comes at the worst possible moment: producers were already facing the need to maximise exports in the face of potentially diminishing demand as major importers shift away from fossil fuels. For Gulf producers who expect uninterrupted exports of oil, liquefied natural gas, refined products, chemicals and fertilizer to fund their economies for decades to come, uncertainty over Hormuz is simply unsustainable, not only geopolitically but economically. Consequently, the key regional powers, Saudi Arabia and the UAE – both of which harbour international ambitions economically and geopolitically – are unlikely to accept any strategic reality in which Iran can constrain their goals over the long term. That, in turn, points to a heightened risk of future confrontation. RonBousso is energy columnist for Reuters.

A vessel at the Strait of Hormuz, off the coast of Oman’s Musandam province. – REUTERSPIX

United CEO said to have pitched merger with American Airlines to Trump WASHINGTON: United Airlines CEO Scott Kirby pitched the potential for merging with American Airlines in a meeting with US President Donald Trump in late February, two sources said, raising the prospect of an industry-reshaping deal likely to face significant regulatory hurdles. scheduled White House meeting on the future of Dulles airport, said the sources with knowledge of the matter. That was three days before the start of the US-Israeli war with Iran that sent jet fuel prices soaring and has led airlines to raise fares and fees to offset higher costs. the deal’s approval would be slim, citing likely opposition from unions, rival airlines, lawmakers and airports, as well as concerns about route overlap and job losses. would give the airlines more pricing power,“ Bloom said. It was not clear whether United has made any formal approach to American or whether a process was underway. The sources spoke on condition of anonymity because the talks were not public. of Transportation data. US Transportation Secretary Sean Duffy said this month that there was room for consolidation in the US airline industry, but warned any deal would face close scrutiny for its impact on consumers.

One person close to the White House said there was skepticism about such a tie-up, given its potential impact on competition and ticket prices at a time when the administration is already focused on rising costs for consumers ahead of midterm elections in November. Antitrust lawyer Seth Bloom said the deal would be unlikely to clear regulatory hurdles, even under a Trump administration that has taken a more relaxed approach to enforcement. “The administration has said it really cares about the issues that affect the consumer’s pocketbook, and this

Ganesh Sitaraman, director of the Vanderbilt Policy Accelerator and author of Why Flying Is Miserable , said a United-American merger would reduce competition. “Fewer choices mean higher ticket prices, more fees, and fewer options for anyone who wants to get from point A to point B,“ he said. American has been under pressure to improve profitability and close the gap with Delta and United, after unions earlier this year criticized management over lagging returns. – Reuters

United and American declined to comment. The White House did not respond to requests for comment. American shares rose more than 5% in after-hours trading following the report, while United shares were little changed. The US airline industry is already highly concentrated, with American, Delta Air Lines, United and Southwest Airlines controlling the bulk of domestic traffic, each with a share of roughly 17%, according to Department

Kirby has argued to administration officials that a combined airline would be a stronger competitor in international markets and noted the Trump administration has focused on US trade deficits around the globe, the sources said. The United CEO said at a forum in September that two-thirds of long-haul seats to and from the US are on foreign carriers, but 60% of passengers are US citizens. Industry officials said the chances of

A combination of two of the largest US network carriers would mark the biggest consolidation move in more than a decade, further tightening a domestic market already dominated by four similarly sized players. Including international flights, United and American were already the world’s two largest airlines by available capacity in 2025, according to OAG data. The meeting with Trump took place on Feb 25 towards the end of a