News & market updates

Investment banks have raised oil price forecasts after Middle East supply disruptions, with some warning Brent could reach $150+/bbl (Goldman sees March >$100/bbl and Brent traded around $100.80 early Friday). Analysts say prices could spike further if the Strait of Hormuz remains closed.

Asian equity markets fell as rising oil prices and escalating Middle East tensions pushed the MSCI Asia‑Pacific down about 1.8% (weekly losses ~2.2%); Brent crude hovered near $100/bbl, tech and export-oriented stocks led declines and currencies showed heightened volatility.

President Anura Kumara Dissanayake convened the Committee on Economic Surveillance to review the economic fallout from the Middle East conflict and warned Sri Lanka can guarantee uninterrupted fuel supplies for only about two months under current conditions. The committee examined rising oil prices, maritime supply-chain disruptions and trade risks and discussed urgent measures to stabilise domestic markets.

Sri Lanka is exploring imports of Russian fuel after the US lifted sanctions, following a favourable response from India to help replenish the country's fuel stocks. Foreign Affairs Minister Vijitha Herath met the Russian ambassador, who said he will convey Sri Lanka's request to Moscow and coordinate arrangements.

Brent crude held near $100/bbl as the escalating Middle East conflict raised fears of supply disruptions; Brent was $99.32 and WTI $93.75, with both set for weekly gains. The IEA agreed to release a record 400 million barrels and the US eased some restrictions on Russian oil exports.

India's cabinet loosened FDI rules to allow investments from land-bordering countries in selected manufacturing sectors, permitting up to 10% stakes without prior approval and expedited reviews within 60 days. The changes target electronic components, capital goods and solar/renewable components while keeping Indian ownership control.

Gulf oil producers have lost at least $15.1 billion in revenues since the Middle East war began, as closures around the Strait of Hormuz have trapped about 20% of global LNG and shut in roughly 10% of global oil output. Alternative export routes and storage are limited, so losses are likely to increase as attacks spread.

Sri Lanka has started talks to buy Russian oil after the US issued a 30-day waiver allowing purchase of sanctioned Russian fuel. Foreign Minister Vijitha Herath discussed the possibility with the Russian ambassador, who agreed to inform Moscow and coordinate arrangements.

The President chaired the Committee on Economic Surveillance to address risks from the Middle East conflict, highlighting rising global oil prices, maritime supply-chain disruptions and impacts on international trade and the domestic market. Attendees included the Central Bank Governor, Treasury Secretary and heads of petroleum, ports, export, tea and tourism agencies.

Asian stocks fell as Iran-related fighting kept oil around $100 a barrel and trimmed expectations for US rate cuts, lifting the dollar and raising inflation and market volatility.

The US issued a 30-day license allowing countries to buy Russian oil stranded at sea, and Brent fell 0.71% to $99.75/bbl while WTI fell 0.92% to $94.85 as supply concerns eased. The move comes after coordinated SPR releases by the US and IEA amid continued Middle East risks around the Strait of Hormuz.

Advocata Institute praised the Government's mid‑month fuel price revision as preventing hoarding and shortages and urged cost‑reflective pricing and greater transparency in the Ceylon Petroleum Corporation's pricing formula, noting fuel accounts for 15% of Sri Lanka's current‑account outflows. It recommended weekly (moving toward daily) adjustments to protect scarce foreign exchange, improve fiscal discipline and encourage a shift to greener substitutes.

COPE found no machinery damage at the Lakvijaya (Norochcholai) coal-fired power plant and recommended that imported coal shipments be tested by an accredited independent laboratory. The committee noted a slight generation shortfall but said the plant — supplying about 35–40% of national electricity — is operating normally.

US President Donald Trump announced a $300 billion plan with Reliance Industries to build a refinery at the Port of Brownsville, Texas. The project is billed to process about 1.2 billion barrels of US shale oil and produce ~50 billion gallons of refined products amid heightened oil-market volatility.

Brent crude topped $100/bbl, jumping over 9% intraday despite IEA members releasing about 400 million barrels from strategic reserves. Asian equities fell — Japan's Nikkei ~1.6% and Australia's ASX200 >1.3% — as markets priced higher inflation and potential rate pressure.

The Ceylon Electricity Board has announced its debenture liabilities were assigned to a newly created private company, raising legal and investor-protection questions about creditor consent, statutory authority and whether the government or original issuer remains liable. Authorities are urged to clarify the legal basis and protections for existing debenture holders.

Synogen launched Synogen Evo, Sri Lanka’s first comprehensive EV charging hub at Independence Arcade with dedicated chargers for cars, three-wheelers and motorbikes plus smart monitoring and load management. The company plans network expansion and integration of renewable energy and intelligent energy management across future sites.

Transmission Network Service Provider chair Nusith Kumaratunga warned a 40% wage demand could force electricity tariffs up by nearly 100%. Unions suspended a strike after Labour Ministry talks; Kumaratunga said the pay rise would add ~Rs.1.8bn/month (~Rs.22bn/yr) and CEB had losses of ~Rs.35bn as of 31 Dec 2025.

The Economic Monitoring Committee has started assessing the economic fallout from the Middle East crisis, flagging risks to foreign-exchange flows, higher energy costs and impacts on remittances, trade and tourism that could affect market stability.

LAUGFS Gas (LGL.N0000) raised domestic LPG cylinder prices: 12.5 kg up Rs.300 to Rs.4,630 and 5 kg up Rs.120 to Rs.1,862, citing higher international LPG costs and tight supply; state-run Litro Gas implemented similar increases.

Brent futures jumped $8.54 (9.28%) to $100.52/bbl after Iran stepped up attacks on oil and transport facilities, raising fears of prolonged disruptions to flows through the Strait of Hormuz. The IEA agreed a record 400 million-barrel release (the US is contributing 172m barrels) but analysts warn it may only be temporary.

Asia-Pacific equities closed mostly higher as investors weighed the Middle East conflict and energy-market moves; Japan led gains (Nikkei +1.43%) while oil eased after earlier spikes, with US crude at $86.15/bbl (+3.24%).

Fitch forecasts global growth slowing slightly to 2.6% in 2026 (from 2.7% in 2025) if the recent oil-price shock is short-lived, and raises its 2026 Brent oil forecast to USD70/bbl. It also expects US growth of 2.2%, China 4.3% and anticipates two Fed cuts in 2026 under the base case.

President Trump announced a 168,000 bpd refinery to be built at Brownsville backed by India’s Reliance, which signed a binding 20-year offtake; America First Refining said it plans to break ground in Q2.

The Economic Surveillance Committee met at the Presidential Secretariat to discuss urgent measures to stabilise Sri Lanka's economy amid the Middle East conflict, focusing on risks from fuel imports, remittances, trade, tourism and export links.

The IEA has proposed the largest-ever release of oil reserves to offset supply disruptions from the war on Iran, prompting choppy oil prices (Brent $87.91/bbl; WTI $83.52/bbl). G7 leaders are discussing emergency stock releases as strikes and refinery outages have tightened supply and raised volatility.

Global markets steadied after a brief oil pullback following reports the IEA proposed the largest-ever release of reserves, with Brent at $87.89/bbl. Investors remain anxious as intensified Middle East fighting raises inflation risk, supporting the dollar and keeping bond yields and central-bank hawkishness in focus.

The Government has formed an Economic Surveillance Committee chaired by Labour Minister Dr. Anil Jayantha Fernando to monitor and recommend responses to the economic fallout from the Middle East conflict, which risks higher fuel costs, reduced remittances (about 1 million migrant workers) and FX pressures. UNCTAD warns Strait of Hormuz disruptions have pushed Brent above $90 and could raise freight and fertiliser costs, amplifying spillovers to trade and vulnerable economies.

The Ceylon Chamber Export Barometer Survey 2026 found more than half of exporters view Sri Lanka's investment climate as worse than peers, citing policy/regulatory uncertainty, labour and energy costs. The 90-respondent survey shows exporters are diversifying and seek a National Single Window, digital systems, capacity-building and FTAs to improve competitiveness.

Oil fell to about $93 a barrel from nearly $120 after US President Trump said the war in Iran would end "very soon", prompting global market gains (FTSE +1.3%, Kospi +6%+, Nikkei +3.1%).