News & market updates

The Government will bring most provisions of the Sri Lanka Electricity Act No. 36 of 2024 into operation from 9 March 2026, enabling a legal framework for power-sector restructuring. The move follows the Preliminary Transfer Plan (5 Jan), Cabinet approval of national electricity/tariff policy (3 Mar) and CEB planning documents (18 Feb).

Fitch says the effective closure of the Strait of Hormuz is likely temporary and, coupled with global oil market oversupply and ample inventories, should limit oil-price rises; it does not expect significant upside to its Dec-2025 assumption of average Brent at USD63/bbl for 2026.

CBSL Governor P. Nandalal Weerasinghe urged targeted South Asia integration by boosting energy links and digital connectivity, highlighting untapped regional renewable potential and India’s digital advances as immediate, practical areas for cooperation.

Fitch says the effective closure of the Strait of Hormuz after Feb 28 is likely temporary and global oil-market oversupply should limit price rises, leaving its December-2025 Brent assumption of USD63/bbl for 2026 largely intact. High inventories and spare OPEC+ capacity reduce near-term disruption risk.

Asia-Pacific stocks were set for their steepest weekly fall in six years while Brent crude rose to around $83/barrel as the Middle East conflict intensified. U.S. Treasury yields climbed about 18 basis points this week and the dollar posted its largest weekly gain in 16 months.

A Gazette issued by Energy Minister Kumara Jayakody transfers the functions, duties and assets of the Ceylon Electricity Board to six successor companies, with the Sri Lanka Electricity Act No. 36 of 2024 taking effect on March 9, 2026. The move follows completion of the preliminary transfer plan, cabinet approval of national electricity and tariff policies, and finalization of key power planning documents.

Government is exploring short-term crude oil and refined product procurements from Africa and the US amid escalating Middle East unrest. Sri Lanka currently sources most fuel from India, Singapore, Malaysia and South Korea and uses mainly term tenders, with pricing to be decided after monitoring global markets.

Government will invest Rs. 46.7 billion from 2025–2028 to expand fuel storage and pipelines, allocating Rs. 31.96 billion for tank construction/refurbishment and funding projects including 24 tanks in Trincomalee (300,000 tons), Jet A1 facilities and pipelines due by 2027–28.

Ceylon Electricity Board posted a Rs. 29.15 bn loss for Q4 ended 31 Dec 2025, reversing from a Rs. 603 mn profit in Q4 2024 (a 4,929% decline). For the full year 2025 the CEB recorded a Rs. 38.73 bn loss versus a Rs. 141.60 bn profit in 2024.

President Anura Kumara Dissanayake convened high-level meetings to review economic risks from the Middle East conflict and ordered monitoring and contingency measures for fuel supplies, tourism, exports and migrant workers. He also asked the Finance Ministry to study a technology-sector investment relief package.

Norway's Deputy Foreign Minister Andreas Motzfeldt Kravik urged rule-of-law and investment-climate reforms to attract Norwegian capital and signalled plans to deepen trade, maritime cooperation, fisheries monitoring, renewable-energy and technology partnerships with Sri Lanka.

SJB MP S.M. Marikkar alleged a Rs. 8,497 million loss from nine coal shipments, citing a PUCSL report. He claimed imported coal had 22–26% ash causing frequent turbine halts at the Lakvijaya plant and said late fees on delayed ships were not collected.

Global markets were volatile as the escalating Middle East conflict pushed oil up (Brent ~$81.18, nearly $10 above last Friday), drove sharp equity losses in Asia (South Korea KOSPI -12%), and lifted US Treasury yields (10-year 4.08%), stoking inflation and rate-cut worries.

Fitch says Middle Eastern sovereign ratings broadly have buffers to withstand a short regional conflict if it lasts under a month and energy infrastructure avoids lasting damage. It warns closure of the Strait of Hormuz or damage to Gulf export infrastructure would be the main channel for rating pressure and expects temporary slowdowns in tourism, aviation and consumer activity.

Saliya Pieris warned Sri Lanka faces economic fallout from the Middle East war, citing rising global oil prices and curtailed gas output, FX volatility, potential drops in European and Middle Eastern tourist arrivals, disruptions to tea exports and risks to remittances, and urged early policy responses.

Oil prices rose as the U.S.–Iran war widened and the Strait of Hormuz was largely closed: Brent gained $1.67 (2.05%) to $83.07/bbl and WTI rose $1.94 (2.60%) to $76.60. Shipping disruptions, Iraq output cuts (~1.5m bpd) and Qatar's LNG force majeure tightened supply.

Government unveiled structural reforms at the AmCham CEO Forum aiming for 7% annual growth and a LKR 200 billion economy, including a 70% renewable-energy target by 2030, bank consolidation, port upgrades and support for IT, pharma and SME finance (LKR 300m ITIA allocation).

Prime Minister Harini Amarasuriya said enhancing energy efficiency is a national priority and the government aims to raise renewable energy to 70% by 2030. The minister noted Ceylon Electricity Board restructuring is in its final phase and energy-efficiency awards were presented to public and private institutions.

Japan and the United States are working to include a Westinghouse-linked nuclear power project in the second round of deals under Japan’s $550 billion investment package. The project aims to bolster energy supply chains amid Middle East tensions and rising demand from AI data centres.

President Anura Kumara Dissanayake led a high-level discussion to assess the potential impact of the Middle East war on Sri Lanka’s economy and instructed urgent measures, including a relief package to promote investment in modern technology and data centres. Officials reviewed risks to fuel and gas supplies, stockpiles, tourism, ports, food security and inflation.

Fitch says a prolonged Iran conflict disrupting Gulf energy and shipping would lift prices and cash flows for upstream APAC energy exporters while squeezing margins and working capital for downstream refiners, chemicals, fertiliser and some metals producers. Australian and Indonesian exporters and gold miners are likely near-term beneficiaries, while refiners with regulated fuel prices face heightened cash-flow risk.

The IMF said on 3 April that Middle East tensions are disrupting trade, triggering surges in energy prices and financial-market volatility and raising global uncertainty; it will provide a fuller assessment in the April World Economic Outlook.

Analysts warn the war in Iran could push Brent crude above $100 — Brent was near $83.36, touching $85.12 — and that a sustained oil shock would widen current account deficits, raise inflation and trigger currency falls and capital outflows in emerging markets. Low-reserve countries such as Sri Lanka, Pakistan, Argentina and Turkey face heightened risks.

Asian stocks slid as investors feared a wider Middle East conflict could spark an energy shock; Seoul plunged 4% (two-day losses over 11%) while Brent crude jumped over 12% to $81.40/bbl. Markets flagged higher inflation and delayed rate-cut expectations, and gold fell about 4.5%.

ASPI plunged 1,290.68 points (-5.4%) to 22,443.38 on Feb 3 after Middle East tensions triggered panic selling and a 30-minute circuit breaker; the S&P SL20 fell 322.32 pts (-4.9%). Turnover was Rs.9.6bn (up 62.9%); foreign investors net sold Rs.59.6m; decliners included COMB, SAMP, HNB, JKH and HAYL, while LIOC, CFLB, BOPL, MRH and MADU were among gainers.

First Capital Research says March 2026 Iran conflict risks could push Brent to $95–110/bbl and raise Sri Lanka's inflation, external deficits and market volatility, complicating monetary policy. It notes shipping diversions may boost Colombo's transshipment role and that equity corrections could offer selective entry points.

Oil prices rose about 2.1% after Iran said it had closed the Strait of Hormuz and warned vessels and pipelines could be attacked; Brent traded at $79.80/bbl and WTI at $72.85/bbl.

WindForce PLC appointed Sanjay Kulatunga as an Independent Non-Executive Director, a move the company says will strengthen its governance, strategic oversight and long-term decision-making.

Global markets plunged as Mideast tensions pushed oil prices higher, with the S&P 500 down 2.4%, the Dow 2.5% (−1,232 pts) and the Nasdaq 2.7%; gold fell 4.9% to $5,051/oz.

Lanka IOC PLC appointed K. Raghu as its Executive/Managing Director, replacing Dipak Das. Raghu brings over 26 years' downstream petroleum experience and will focus on growth, operational excellence and advancing sustainable energy solutions.