The U.S. and Israeli strikes on Iran have reignited geopolitical tensions in the Middle East, stoking fears of a broader conflict that could disrupt critical energy supply routes – particularly the Strait of Hormuz, through which roughly one-fifth of the world’s oil supply flows. Brent crude has already edged higher, and global oil markets warn prices could climb toward, or even exceed, US$80–100 a barrel if hostilities escalate.

Against this backdrop, an independent economic analyst told The Island that for Sri Lanka – a small, fuel-importing economy with limited domestic energy resources – the implications could be significant.

“Sri Lanka imports over 90% of its petroleum requirements, and any sustained rise in global crude prices would expand the annual import bill, placing renewed pressure on already tight foreign exchange reserves,” he said.

Even moderate spikes in oil prices, he noted, tend to filter quickly through the domestic economy. “Higher fuel costs translate into increased transport and production expenses, which feed into inflation and erode household purchasing power. Freight charges for essential goods – from food items to industrial inputs – would also rise.”

“The Middle East remains a key source of remittances and export demand,” the analyst explained. “A large share of Sri Lankan migrant workers are employed in Gulf economies, while regional markets absorb tea and other exports. Heightened instability could weaken remittance inflows and soften demand, further straining the balance of payments.”

When asked whether the Central Bank of Sri Lanka (CBSL) might be compelled to shift policy in response, the analyst said the monetary authority faces a delicate balancing act.

“Rising import inflation stemming from higher global energy prices could push the Central Bank to maintain – or even tighten – its monetary policy stance in order to safeguard price stability and support the rupee. A firmer stance may be deemed necessary to anchor inflation expectations and preserve market confidence. The Central Bank is therefore likely to monitor inflation data closely in the coming weeks to assess whether energy-driven price pressures prove temporary or more entrenched,” he said.

Meanwhile, Ceylon Petroleum Corporation (CPC) Chairman S. Rajakaruna said that Sri Lanka’s fuel imports – sourced primarily from Singapore and India – reduce immediate exposure to supply disruptions directly linked to Middle Eastern routes. He also sought to allay public concerns, noting that the country currently maintains sufficient fuel stocks for approximately one month and that there need not be any queueing up by the public to hoard supplies.

However, the analyst cautioned that while physical supply may remain stable, global price pass-through effects are an unavoidable risk.

Meanwhile, Opposition politician Wimal Weerawansa said that official assurances of “one month’s stock” tend to unsettle the public, arguing that such statements evoke memories of past shortages and public distress.

By Sanath Nanayakkare

The Ministry of Education officially recognised LOLC Holdings PLC for its flagship humanitarian initiative, Divi Saviya, at a special ceremony held on 27th February 2026 in Battaramulla. The event marked the second time the Ministry has acknowledged the programme’s contribution to the nation’s education sector.

Group Managing Director/CEO Kapila Jayawardena presented a project update to Prime Minister and Education Minister Dr. Harini Amarasuriya, highlighting the rapid restoration of 200 schools under Phase 02 of ‘Obai, Mamai, Ape Ratai’. The schools were repaired and handed over within just 45 days, enabling students displaced by Cyclone Ditwah to safely resume learning.

Phase 02 follows a needs assessment that identified 200 damaged schools and 4,000 displaced families. Implemented with Divisional Secretariats and Disaster Management Centres, the Rs. 500 million programme has delivered Family Super Packs and school renovations across six districts.

Kapila Jayawardena stated, “It was a privilege to share these outcomes with the Prime Minister. This recognition reflects how private sector collaboration can complement government efforts during national challenges.” Plans are underway to fully rebuild select schools destroyed by the cyclone.