## 📈 Global Oil Surge Amid Middle East Conflict: Impact on SL Economy

Oil prices are set for further gains as the U.S.-Israeli conflict with Iran enters its third week, triggering the world’s largest supply disruption. With the Strait of Hormuz closed—a chokepoint for 20% of global supply—crude futures have surged over 40% this month to their highest levels since 2022. • Supply & Infrastructure: Global supply is expected to drop by 8 million bpd in March. While UAE’s Fujairah terminal (1% of world demand) has resumed loading, major hubs like Iran’s Kharg Island and Saudi Arabia's Ras Tanura remain highly vulnerable. • Global Response: The IEA is releasing a record 400 million barrels from strategic stockpiles to combat spikes. Diplomatic negotiations have stalled, with both the U.S. and Iran maintaining defiant stances. • Sri Lankan Context: As a net oil importer, Sri Lanka faces significant pressure on foreign exchange reserves and domestic energy costs. Sustained high prices could impact the transportation and manufacturing sectors, potentially thinning trade margins for apparel & textiles and tea exports due to rising logistics costs. The situation remains volatile based on provisional market data, with further price volatility expected at Monday’s market open. ---