News & market updates

Oil prices have surged (Brent and WTI up more than 40% this month) as U.S.-Israeli strikes on Iran and threats to Kharg Island have put Gulf export facilities at risk and closed the Strait of Hormuz. The IEA says global supply could fall ~8m bpd in March and agreed a 400m-barrel release.

President Anura Kumara Dissanayake met with ministry secretaries to plan maintenance of essential services amid the Middle East conflict, instructing exploration of regional fuel reserves for critical sectors, a feasibility study on remote working, and prompt fixes/streamlining of the digital QR code system.

Sri Lanka has restricted fuel supply from March 15, requiring motorists to obtain QR codes and imposing weekly quotas to curb hoarding amid Middle East geopolitical disruptions (Motorcycles 5L; Motor Cars 15L; Three-Wheelers 15L; Vans 40L; Lorries/Buses 60–200L).

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.

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.

The CSE fell as the ASPI dropped 4.45% (1,009.36 pts), wiping Rs. 348.6 billion amid Middle East tensions and oil topping $100/bbl. Banking shares including COMB, HNB, HAYL and NTB were leading negatives while capital goods and crossings by MELS, ACL and AEL drove turnover.

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.

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.

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.

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.

The Colombo All Share Price Index fell 1.44% to 21,672.42 as Brent crude topped $100/bbl. Commercial Bank, Hayleys and Hatton National Bank were top negative contributors, and John Keells Holdings said its unit is selling a 98.39% stake in Kandy Walk Inn (Cinnamon Citadel).

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.

ASPI fell 1.63% to 21,998.12 as Middle East tensions and higher oil prices weighed on the Colombo market. S&P SL20 dropped 1.71% to 6,172.28 with broad declines led by JKH, HNB, MELS, HAYL and SAMP; turnover topped Rs.4.1bn and foreigners were net buyers of Rs.32.2m.

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.

Colombo Stock Exchange closed down 1.34% on Friday, with the ASPI at 21,692.55. Melstacorp said parent Milford Exports bought 1,000,000 shares raising its stake to 42.97%; Commercial Bank, Hayleys and Hatton National Bank were top negative contributors and Brent crude neared $100/bbl.

Sri Lanka's ASPI fell 1.63% to 21,988.12 as global uncertainty and Brent crude near $101.6 weighed on markets; John Keells Holdings, Hatton National Bank and Melstacorp were top negative contributors. Melstacorp said it sold 2,000,000 Distillery Company shares at Rs.59, trimming its stake to 92.35%.

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.

All Ceylon Bakery Owners Association warned bakeries nationwide are facing shortages of diesel, petrol, kerosene and gas and urged the government to ensure uninterrupted supplies and allow fuel in cans for operations. About 25% use gas and 25–30% use diesel/kerosene; owners do not expect to raise prices despite shortages and some power outages.

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.