Israel-US attack on Iran will affect energy prices, impact countries far away like Singapore: SM Lee

SINGAPORE – The

attack on Iran by Israel and the United States

will impact energy prices and affect countries far from the conflict, like Singapore, said Senior Minister Lee Hsien Loong.

Speaking at a Chinese New Year dinner at Teck Ghee Community Club on Feb 28, SM Lee said the attack contributes to an uncertain global climate that will in turn affect trade and investment.

He noted that tensions between the US and Iran have been building for weeks, and that America had assembled a huge military force in the Middle East, including

aircraft carriers

, destroyers, and missile defence and attack systems.

“Today, Israel and the US together attacked Iran jointly,” SM Lee said.

“The war has begun. Iran has struck back – cities, targets across the Middle East, Israel itself, Doha, Kuwait, Bahrain, the UAE.”

Noting the potential impact of the war, he said: “You can see when the war will start. It is very hard to tell how the war will end.”

SM Lee said that in an uncertain world, Singapore cannot take its good economic performance in the previous year for granted.

He noted that it had done better than expected with

gross domestic product growth of 5 per cent

, and an increase in wages and lower inflation.

And while he hopes Singapore will continue to do well in 2026, it is unclear what new surprises are in store.

The attack on Feb 28 follows a 12-day air war in June 2025 between Israel and Iran and repeated US-Israeli warnings that they would strike again if Iran pressed ahead with its nuclear and ballistic missile programmes.

During that time, the US had also

struck three Iranian nuclear sites

, with the attack producing conflicting reports over the extent of damage done to Iran’s nuclear capabilities.

On the global economic front, SM Lee highlighted

US President Donald Trump’s new global tariffs

 that came as a response to the Supreme Court ruling on Feb 20 that most of the duties imposed by the US administration in 2025

were illegal

.

SM Lee said that while the US administration had responded to the ruling by immediately invoking another law to

impose a flat 10 per cent tariff

on all countries, Mr Trump changed his mind within a day and raised it to 15 per cent.

SM Lee said: “We watched with concern. But so far, the official US tariff rate is still 10 per cent. So we are relieved, but I think we have to watch very carefully.”

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

He said: “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 tomorrow.

“And this is going to affect us too, as a small and open economy reliant on global trade and investments.”

He said that under such conditions, the Government will do its part to help Singaporeans, but also urged them to upgrade themselves with new skills.

SM Lee said Prime Minister Lawrence Wong on Feb 12 had unveiled 

Budget 2026

 with help for businesses, workers, the elderly and vulnerable, and households, to cope with cost-of-living concerns.

SM Lee highlighted schemes including the Cost-of-Living Special Payment of between $200 and $400 for eligible Singaporeans, the

$500 in CDC vouchers

 for every household next January, and more generous U-Save rebates to help with utilities expenses.

“Most households will receive some form of financial help almost every month – whether it’s U-Save or S&CC (service and conservancy charges) rebates, whether it’s CPF top-ups, LifeSG credits, CDC vouchers or cash,” he said.

He also noted how the Government is investing in strengthening the economy, especially to encourage and support Singaporean workers in learning how to use artificial intelligence (AI).

The new moves announced by PM Wong include the expansion of the Enterprise Innovation Scheme to

support businesses in their adoption of AI,

and free subscriptions to AI tools for Singaporeans taking up selected AI training courses.

SM Lee urged Singaporeans to play their part too, to continue to learn new skills like AI.

He said: “Our companies have to upgrade themselves, reinvent and transform their businesses to stay competitive.

“And I hope everyone makes full use of the support you are getting through our various programmes, and works together to take advantage of these opportunities and overcome the challenges ahead of us to build a brighter future for ourselves.”

Separately, SM Lee, who is an MP for Ang Mo Kio GRC, paid tribute to former MPs S. Vasoo and Yeo Toon Chia, who recently stepped down as second advisers to the Ang Mo Kio grassroots organisations after decades of service.

Dr Vasoo entered politics as a PAP MP for Bo Wen constituency in 1984.

He spent 17 years as an MP before becoming an honorary adviser to Ang Mo Kio GRC. 

Mr Yeo was first elected to Parliament in 1970 as an MP for Kampong Kapor in a by-election, and retired as an MP in 1997 after more than 20 years as an MP in Ang Mo Kio.

SM Lee added that fellow Ang Mo Kio GRC MP Nadia Samdin will be taking over Dr Vasoo’s and Mr Yeo’s responsibilities in the Teck Ghee division, in addition to her responsibilities in Cheng San.