News & market updates

Experts urged the Government to ration fuel, warning supplies could be exhausted in about 20 days as oil rose above $90/barrel. The President said diesel stocks cover 33 days and petrol 28 days (extendable to ~40 days with scheduled incoming shipments) and outlined storage limits.

Global oil prices surged about 25% to around $119.5/barrel (Brent and WTI) on an escalating Iran war, reaching highs since mid-2022; analysts say Sri Lanka will be forced to raise domestic fuel prices when importing at the higher levels.

Fitch warns the Iran conflict could raise credit risks for emerging-market sovereigns by raising global energy prices and straining remittances, fiscal subsidies, exchange rates and access to finance; hydrocarbon exporters could benefit while importers (e.g. Pakistan, Egypt, Philippines, Ukraine) are more vulnerable.

Colombo Stock Exchange plunged with the ASPI down 3.28% to 21,957.83 as global oil prices surged above $100 a barrel amid the West Asia conflict; S&P SL20 fell 3.38% to 6,145.67 and market turnover was 1.97 billion rupees.

Sri Lanka's rupee weakened to 311.50/312.00 against the US dollar (from 311.00/20 on Friday) and government bond yields opened higher after global oil prices jumped over 20% and rose above $100/barrel.

Brent crude topped $100/bbl at $107.97 and WTI about $106.22 as the Iran-related war disrupted Middle East production and shipping, sending prices ~16–17% higher from last Friday. The disruption has curtailed tanker traffic through the Strait of Hormuz and prompted Gulf output cuts.

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.

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.

Fitch says the duration of Middle East aviation disruption after the 28 Feb attacks will determine effects on airlines, airports, lodging, insurers and lessors — more than 15,000 flights were cancelled between 28 Feb and 5 Mar, affecting over 1.5m passengers. Fitch's baseline expects the conflict to last under a month limiting rated issuers' exposure, but a prolonged disruption would raise costs (longer routings, higher fuel, accommodation) and hit smaller or less diversified firms.

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.

JAT Holdings PLC completed the second-phase expansion of its binder plant, increasing production capacity by 76% and bringing the facility into full operation. The upgrade is intended to support growth in emulsions and coatings, reduce import reliance, and improve cost predictability and FX exposure.

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.

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.

Colombo Stock Exchange closed up 1.13% to 22,833.53, led by gains in John Keells, DFCC and National Development Bank while Senkadagala Finance fell 10.66%. National Development Bank received CSE approval in principle to list Rs.16 billion of debentures at 11.50%, 11.04% and 11.85%.

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%.

Iran's death toll from US-Israeli attacks has risen to 787, state media cited the Iranian Red Crescent, which said over 500 locations in at least 153 cities were struck.

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.

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.