News & market updates

The United Arab Emirates quit OPEC and OPEC+, removing a key Gulf member and weakening the cartel's cohesion, with potential implications for global oil supply and prices. The move comes amid disruptions to shipments through the Strait of Hormuz after attacks linked to the Iran war.

The UAE will quit OPEC from May 1, freeing its 5 million bpd capacity and raising short-term market volatility and the risk of higher global oil prices. For Sri Lanka, a net oil importer spending nearly a fifth of its import bill on energy, this could increase the fuel import bill, pressure the rupee and drive inflation while accelerating calls for bilateral supply deals and renewables.

Brent crude rose above $110, trading as high as $112.70 a barrel, the strongest in three weeks. The jump stoked inflation concerns, pushed up sovereign bond yields and revived expectations that central banks may lift interest rates.

The United Arab Emirates quit OPEC and OPEC+, removing a key oil producer with spare capacity and potentially freeing it to raise output; the move weakens OPEC's collective influence and could lead to greater oil-price volatility.

IFC will invest up to $18 million via a local‑currency loan in WindForce PLC to develop Sri Lanka’s first 100 MW utility‑scale solar plant, expected to generate about 220 GWh/year. The project includes advisory support, enables future battery storage, and is projected to create over 3,000 jobs and lower electricity costs.

Rising energy costs from the Iran war are widening economic strain across emerging markets, prompting tighter monetary policy and fiscal pressure; the IMF cut growth for emerging and developing economies to 3.9% from 4.2%, with countries like Sri Lanka, Egypt and Pakistan highlighted as vulnerable.

Sri Lanka faces structural energy insecurity—hydro-dependent, import-reliant thermal generation and an ageing grid—while rooftop solar reached about 9.5% of supply in 2025 but is constrained by grid saturation and high battery costs. Recommended near-term policy fixes include storage subsidies, community microgrids, time-of-use tariffs and accelerated smart meter rollout.

Former CPC MD Susantha Silva said diesel landed cost is nearing $350 per barrel, domestic diesel is being sold at a loss exceeding Rs. 280 per litre, and import financing for a 40,000-tonne shipment has risen to about $70m, straining Sri Lanka's fuel import model.

WindForce PLC secured a loan facility of up to $18 million from the IFC, with $10m allocated for its equity contribution to a 100MW Siyambalanduwa solar park and $8m earmarked for battery storage and other renewable investments.

WindForce PLC has agreed a loan facility with the IFC for up to the LKR equivalent of USD 18 million, approved by its board on 20 April 2026. Up to USD 10m will fund its equity in the 100MW Siyambalanduwa solar park (Rividhanavi) and up to USD 8m is for battery storage or other renewable projects.

Colombo Stock Exchange All Share Price Index rose 0.20% to 22,612 as retail-driven activity lifted the market. Listed energy firm WindForce said it entered a loan agreement with IFC to obtain up to $18 million in two phases.

Sri Lanka's apparel exports fell 8% in Q1 2026 year-on-year, worsening from a 3% decline in January to 11% in February and March. The sector cites higher operating costs—fuel and electricity adding nearly USD 3m monthly—and calls for energy reform, GSP+ renewal, U.S. engagement and expanded India access.

WindForce PLC (WIND.N0000) has entered a loan agreement with IFC for up to $18m in two phases—$10m for equity in the 100MW Siyambalanduwa solar park and $8m for battery energy storage or other renewable projects.

Oil rose more than 1% after US‑Iran peace talks stalled and shipments through the Strait of Hormuz remained limited; Brent was $106.68/bbl and WTI $95.35.

Oil climbed about 2% to a three-week high of $107.97 a barrel as stalled U.S.-Iran talks prolonged disruptions to Middle East energy exports. Renewed AI-driven buying lifted chip stocks while markets braced for multiple central bank meetings and interest-rate guidance this week.

Primary surplus rose 86.7% YoY to Rs.222.82bn in Jan 2026 and the overall budget deficit narrowed to Rs.3.81bn, reflecting marked fiscal consolidation and bringing Sri Lanka closer to a ~$700m IMF tranche conditional on pricing reforms. Higher energy costs and reconstruction spending remain risks; the government announced a Rs.100bn short-term relief package for the energy shock.

JB Securities says vehicle import values fell to $148.4m in February from $240.9m in December 2025, signalling a tapering contribution from vehicle imports to growth and fiscal revenues. It also warns fuel prices will rise on 1 May (diesel more) and expects higher EV demand and rooftop solar uptake.

Volt Charge’s charging data estimates a 72-hour interpolated national EV charging peak of about 3.13 MW, with modeled 50–70% simultaneous charging raising demand to ~80–115 MW and an extreme all-vehicles-charging scenario reaching ~165 MW. The piece says EV demand is manageable and that smart charging and time-of-use tariffs can shift load to off-peak/daytime solar to support grid stability.

CPC reported a profit of Rs. 36.4 billion in 2025, its third consecutive annual profit. The Central Bank said cost-reflective pricing and lower average Brent crude ($68.25, -14.5%) helped results, though crude spiked in March 2026 due to Middle East tensions.

UNDP warns more than 30 million people could be pushed back into poverty from the economic fallout of the Iran war, driven by disruptions to fuel and fertiliser supplies and blocked shipping through the Strait of Hormuz. It said fertiliser shortages have already reduced agricultural productivity and food insecurity will peak in a few months.

Asia shares were mixed while oil rose over 1% as Middle East tensions and stalled U.S.-Iran talks kept markets on edge; Brent hit $106.21/bbl and U.S. crude $96.77. Investors also eyed central bank decisions next week and a yen near 159.78 per dollar.

WFP warns the Middle East conflict is threatening Sri Lanka's recovery by driving fuel costs up 33–40%, raising food and fertiliser import bills (Sri Lanka imported $2.5bn of food in 2025) and risking remittances (around 80% originate in the Gulf). These shocks could push inflation higher, weaken the rupee, strain reserves and hit tourism and household food security.

Advocata Institute says the recent LPG retail increase of Rs.775 left a shortfall of Rs.225–425 per 12.5kg cylinder after Saudi Aramco’s benchmark added Rs.1,000–1,200 to landing costs, with the gap covered by cross-subsidisation that shifts costs onto households. It urges cost-reflective pricing and targeted cash transfers.

The EPF's listed equity portfolio rose 27% to Rs. 188.85 billion at end-2025. The fund cut holdings from 65 to 59, fully exited six counters (Cargills Bank, Ceylon Hotels, Colombo Dockyard, Jetwing Symphony, LAUGFS Gas, Sierra Cables) and added Hemas (40m shares); gains were led by banks and diversified stocks.

Prof. Samitha Hettige argues Sri Lanka should adopt cleaner coal technologies and leverage China’s BRI to strengthen energy security, citing the Norochcholai (Lakvijaya) coal plant and Chinese advances in high-efficiency coal units.

Petroleum Distributors’ Association has appealed to President Dissanayake to revise CPC Circular No.1109 (effective 1 Mar 2025) that replaced percentage commissions with a fixed per‑litre margin, saying it makes dealer operations financially unsustainable and risks station closures.

Colombo stocks rose 0.25% as foreign investors turned net buyers after a 21-session selling streak, recording a net inflow of Rs. 19.8 million and lifting the ASPI 55.45 points to 22,625.48. Top contributors included CINS, BUKI, CFIN, MELS and NHL, while consumer services led turnover and oil price moderation supported sentiment.