Business
Oil prices steady despite Middle East tensions, but risks are rising
In recent weeks, missile and drone attacks on cargo ships crossing the Red Sea have caused the biggest disruption to global trade since the COVID-19 pandemic. Despite delayed supplies, however, oil prices have remained surprisingly stable.
In response to Israel’s war on Gaza, Houthi rebels – the Iran-aligned Shia movement that controls northern Yemen and its western coastline – have launched a wave of assaults on ships in the Red Sea. By targeting vessels with perceived links to Israel, they are attempting to force Tel Aviv to stop the war and admit full humanitarian aid into Gaza. Houthis have launched at least 26 separate attacks since November 19 on merchant freighters.
Though no ships have yet been sunk, the United States recently dispatched a multinational naval task force to the region. On December 31, American Navy helicopters killed 10 Houthi fighters and sank three of the group’s speedboats.
The following day, Iran dispatched its Alborz warship to the Red Sea, compounding an already volatile situation. The government did not provide information on the vessel’s mission.
On Wednesday, Houthi rebels fired their largest barrage of projectiles yet, forcing an engagement with US and British naval forces. On Thursday night, the US and UK led a bombing campaign against multiple Houthi facilities in Yemen.
While Brent crude briefly topped $80 per barrel after Thursday’s air strikes, oil prices have mostly trended sideways in recent weeks. Market fundamentals suggest a balanced, or slightly surplus, market. And until there is a clear threat to global supply, traders appear to have relegated tensions in the Middle East to background noise.
Houthi activity has so far been concentrated in the narrow strait of Bab al-Mandab, which connects the Gulf of Aden to the Red Sea. Approximately 50 ships sail through the strait every day, heading to and from the Suez Canal – a central artery for global trade.
Some of the world’s largest shipping companies have suspended transit in the region, forcing vessels to sail around the Cape of Good Hope in Southern Africa. The lengthier route has raised freight rates due to higher fuel, crew and insurance costs.

According to Clarksons, a shipbroker, roughly 24,000 vessels crossed the Suez Canal last year. That amounts to one-tenth of global trade, including 10 percent of seaborne oil and 8 percent of liquefied natural gas.
Ships travelling through the Suez Canal have taken on greater strategic significance since the war in Ukraine, as Russian sanctions have made Europe more dependent on oil from the Middle East, which supplies one-third of the world’s Brent crude, the international benchmark.
“The region is an important channel for freight, representing almost one-third of global container capacity. As such, Houthi-linked bottlenecks pose a new risk to inflation,” said Rahul Sharan, a senior manager for maritime consultancy Drewry.
“We’ve seen hundreds of vessels rerouted from the Suez Canal in recent months. We don’t yet have visibility on which industries have been most severely affected, but consumer goods costs could rise if oil and gas prices increase.”
Despite diverting supplies from the Suez Canal, tensions in the Red Sea have so far had a muted impact on energy prices. “We’ve seen plenty of volatility, so geopolitical risks are being considered. But not enough to lift prices,” says energy trader Mohammed Yagoub.
“The truth is that headline fatigue has set in. There’s been a lot of coverage on tensions in the Red Sea, especially today. But global supplies have remained broadly steady in recent weeks,” Yagoub told Al Jazeera.
“You have to remember that the oil can still travel around Africa, as well as from ports in western Saudi Arabia, bypassing the need to cross Bab al-Mandeb.” The Houthis, he said, were also unlikely to attack ships from friendly oil and gas-producing countries in the region.
There are other factors at play – recent record US production, the lifting of oil sanctions in Venezuela and tepid global demand, Yagoub added.
However, looking ahead, he warned that “tensions in Iran, especially around Hormuz, could move the needle on prices.”
Approximately 17 million barrels of crude oil, nearly one-sixth of global supply, are transported on a daily basis through the Strait of Hormuz, between the Arabian Gulf and the Gulf of Oman. If Iran became actively engaged in the conflict, Tehran could threaten to close this vital channel.
Any such closure could see crude prices surge by 20 percent in a month and higher thereafter, according to Callum Bruce, an analyst at Goldman Sachs. “It would be a huge, huge shock. For now, though, the implied market probability of that happening is less than 1 percent,” he said. Tehran has appeared reluctant to engage in military conflict with the US military and its economy remains fragile.
Bruce pointed out that “oil traders will continue paying close attention to activity in the Middle East. Gaza is ground zero. Then, you have the Red Sea. Tensions across the region have also ratcheted up in recent weeks.”
On January 2, senior Hamas leader Saleh al-Arouri was killed in Beirut by an Israeli drone raid following three months of hostilities at the Lebanon-Israel border. It was the first air raid on Beirut since 2006.
This past week, Israel assassinated a Hezbollah commander in south Lebanon, while Hezbollah, which has Iranian support, struck a sensitive Israeli base with rockets. Meanwhile, Iran-backed groups in Iraq have stepped up attacks on US military bases.
For his part, US President Joe Biden has said he is keen to prevent the war on Gaza from spiralling into an all-out regional conflagration, though the bombing of Yemen has been viewed by the Houthis as an escalation. On Sunday, US Secretary of State Anthony Blinken was dispatched to the Middle East on a diplomatic trip for the fourth time in three months.
“Israel’s war with Hamas seems to have energised already existing tensions,” said Bruce. “And while US naval activity in the Red Sea provoked headlines, economic essentials are continuing to dictate oil prices.”
Mohammed Yagoub added, “It’s true that mega-trends are pre-occupying traders. But the likelihood of a regional conflict will increase the longer the fighting in Gaza persists. Yemen is proving that. So, you could make the case that oil traders are too sanguine right now.”
(Aljazeera)
Business
Steps leading to the achievement of SL’s national interest in IOR
Sri Lanka needs to build awareness, effective policies and encourage regional multilateral frameworks to develop a multi-pronged approach to secure its national interest and safeguard regional stability in the Indian Ocean Region (IOR), as the region together with its seabed have become an area of strategic competition, former Assistant Chief Cabinet Secretary to former Japanese Prime Minister Shinzo Abe, Prof Nobukatsu Kanehara said.
“The Indian Ocean has been a maritime highway for millennia, with Sri Lanka being a midway point of the flow of trade, culture, technology and intellectual progress, Prof Kanehara said at the 4th Pathfinder Foundation Sri Lanka Indian Ocean Security Council Conference held recently at the Cinnamon Grand Hotel. The forum was presided over by Pathfinder Foundation Sri Lanka Chairman Ambassador (retd.) Dr. Bernard Goonetilleke.
The forum’s purpose was to obtain expert commentary regarding the need for Sri Lanka to ‘up its game’ in the IOR.
Abe said that from the 1870s onwards, the Indian Ocean had become the global communications highway, with the British Empire laying submarine cables from Aden to Mumbai, linking Europe to South Asia.
‘Since then, with the passage of time, Ceylon, and later Sri Lanka, has seen the bulk of the global digital communications umbilical laid through its maritime domain of influence, with over a dozen such cables laid over the island’s Exclusive Economic Zone (EEZ) thus far, he said.
Prof. Kanehera added: ” With the rise of Artificial Intelligence (AI) and increasing digitisation, such submarine cables have become critical strategic infrastructure for the island nation as well as the region.
‘This timely conference came as world powers rushed to secure critical minerals needed to maintain a technology edge over rivals, both militarily and economically, disrupting the longstanding rules-based order, especially at sea and in trade.
‘The lack of cognition regarding how to understand and navigate the return to a near Cold War era strategic competition in the Indian Ocean, and increasingly in the sub-surface domain and the seabed, among Sri Lanka’s policy making community, bureaucrats and public leaves the economically weakened island nation more vulnerable to geopolitical coercion, shocks and tug-o-war, which will likely increase in the coming decade.’
By Hiran H Senewiratne
Business
Automobile Association of Ceylon donates towards Disaster Relief Support Fund
Automobile Association of Ceylon (AAC) donated Rs. 25 Million towards the Disaster Relief Support Fund to assist the Ditwah Cyclone victims.
A donation was handed over to Dr. S N Kumanayake, Secretary to the President of Democratic Socialistic Republic of Sri Lanka by Dhammika Attygalle, President – AAC at the Presidential Secretariat on the 19th February 2026 in the presence of Executive Committee members.
Dhammika Attygalle President AAC (third from Left) handing over the cheque to Dr S N Kumanayake, Secretary to the President of Democratic Socialistic Republic of Sri Lanka.
In the picture L-R Lasitha Gunaratne- EXCO Member – AAC, Devapriya Hettiarachchi – Secretary -AAC, P H Liyanage, P B Kulatunga & Indunil Udaya – Members of the EXCO – AAC
Business
‘Sri Lanka’s first AI-powered digital trainer for Banca partners’
HNB Assurance PLC recently introduced NAVI, The Digital Trainer, a new AI-powered training companion designed to support its banca staff with instant, reliable access to knowledge, whenever they need it. The solution was unveiled at Partnership Life, the company’s annual forum dedicated to celebrating the performance of its Partnership Channel.
Built to make learning simpler and more accessible, NAVI is a voice-enabled AI chatbot that helps banca staff quickly find product information, policy details, and process-related guidance by drawing from a centralized knowledge bank. Whether on the go or at the point of customer interaction, NAVI ensures that answers are never out of reach.
Sharing his thoughts, Sanesh Fernando, Chief Business Officer / GM – Partnership Channel at HNB Assurance, opined, “With NAVI, our intention is to make learning a part of everyday conversations. By combining chat and voice capabilities, we are making it easier for our officers to learn on demand and perform with greater confidence.” He further noted that it is this continuous focus on meaningful innovation that has consistently set HNB Assurance apart within the bancassurance space. “Solutions like NAVI reflect the way we think and operate as a Partnership Channel. This commitment to enabling our partners and bancassurance officers through practical, forward-thinking initiatives has been a key driver in our journey, one that has seen us being recognized as the Best Life Bancassurance Provider for five consecutive years, while also delivering strong and sustained growth year after year.”
Commenting on the launch, Suneth Jayamanne, Chief Information Officer / GM of HNB Assurance, said, “We see NAVI as a support system rather than a piece of technology. Our Bancassurance officers operate in fast-paced environments and having instant access to the right information can make all the difference. NAVI is about helping our people feel more prepared, more confident, and more connected to the knowledge they need to serve customers better.”
The launch of NAVI was marked by an engaging reveal featuring an AI-generated avatar that introduced the digital trainer and its capabilities, symbolizing a shift towards a more intuitive and people-friendly approach to learning.
As HNB Assurance continues to expand its Partnership Channel, innovations such as NAVI highlights the company’s focus on building strong, well-supported partnerships, blending technology with a deep understanding of how people learn, and work.
HNB Assurance PLC (HNBA) is one of the fastest growing Insurance Companies in Sri Lanka with a network of 79 branches. HNBA is a Life Insurance company with a rating of ‘A’ (lka) by Fitch Ratings Lanka for ‘National Insurer Financial Strength Rating’. Following the introduction of the segregation rules by the Insurance Regulator, HNB General Insurance Limited (HNBGI) was created and commenced its operations in January 2015; HNBGI continues to specialize in motor, non-motor and Takaful insurance solutions and is a fully owned subsidiary of HNB Assurance PLC. HNB General Insurance has been assigned a ‘National Insurer Financial Strength Rating’ of ‘A’ (lka) by Fitch Ratings Lanka Limited. HNBA is rated within the Top 100 brands and Top 100 companies in Sri Lanka by LMD and HNB Assurance has won international awards for Brand Excellence, Digital Marketing and HR Excellence including the Great Place To Work® Certification, and won many awards for its Annual Reports at award ceremonies organized by the Institute of Chartered Accountants of Sri Lanka.
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