When war broke out in the Middle East on February 28, 2026, global markets reacted immediately. Oil prices surged, trade routes were disrupted, and investors rushed to pull money out of risky assets. The situation escalated quickly as conflict involving the United States, Israel, and Iran led to the effective shutdown of the Strait of Hormuz—a critical shipping route that carries a large portion of the world’s oil and gas.
Most stock markets around the world fell sharply during this period. But Singapore stood out.
The Singapore stock market, represented by the Straits Times Index (STI), remained relatively stable and even saw gains in certain sectors. Instead of collapsing under pressure, parts of the market actually benefited. This was not by chance—it was driven by Singapore’s role as a safe haven and the strength of key industries tied to global trends like energy security and artificial intelligence (AI).
Palm Oil
- Kencana Agri (SGX: BNE)
- Bumitama Agri (SGX: P8Z)
- First Resources (SGX: EB5)
- Wilmar (SGX: F34)
The palm oil sector was one of the biggest winners during the conflict.
The main reason is simple: when oil prices rise, palm oil becomes more valuable.
Crude oil is used to produce diesel, and when diesel becomes expensive, countries start looking for alternatives. One of these alternatives is biodiesel made from palm oil. As oil prices surged past $100 per barrel, demand for palm-based fuel (biofuels) increased significantly.
Biofuels replace crude oil partially – derived fuels mainly through blending and direct substitution. First, fuels like ethanol and biodiesel are mixed with gasoline and diesel (e.g., ethanol in petrol, biodiesel in diesel), gradually reducing the share of petroleum in everyday fuel use.
Second, more advanced “drop-in” biofuels – such as renewable diesel and sustainable aviation fuel, are chemically similar to fossil fuels and can fully replace them without changing engines or infrastructure.
Globally, this replacement is happening through rising national mandates: countries like Brazil and Indonesia are pushing blends toward 30–40%, while others like India, United States, and the European Union are steadily increasing biofuel content in transport fuels. Overall, biofuels act as a scalable, partial substitute for crude oil, progressively displacing it in transport by increasing blend ratios and introducing fully compatible renewable alternatives.
Overall, companies focused on upstream production (growing and harvesting palm oil) benefited the most because they could directly capture diverted demand and a higher selling price.
Energy
- Oiltek (SGX: HQU)
- China Aviation Oil (SGX: G92)
- RH Petrogas (SGX: T13)
- Union Gas (SGX: 1F2)
- Geo Energy (SGX:RE4)
The energy sector saw strong gains due to a global supply shock.
The closure of the Strait of Hormuz disrupted the flow of about 20 million barrels of oil per day. This created a shortage in the market and pushed prices higher. On top of that, shipping and insurance costs increased, adding a “risk premium” to oil prices.
Different parts of the energy sector benefited in different ways:
- Upstream companies (like oil and gas producers) gained directly from higher selling prices
- Coal producers benefited as coal became a cheaper alternative to gas
- Renewable energy firms gained attention as countries looked for energy independence
- Gas distributors remained stable because demand for essential energy (like cooking gas) does not fall easily
Even though Singapore imports most of its energy, its companies were still able to benefit from global price movements and shifts in demand.
Marine
- Seatrium (SGX: 5E2)
- Beng Kuang Marine (SGX: BEZ)
- Nam Cheong (SGX: N4E)
- Yangzijiang Shipbuilding (SGX: BS6)
The marine and offshore sector experienced a strong revival during the conflict.
The war exposed how fragile global energy supply chains are. As a result, energy companies rushed to invest in infrastructure—such as ships, offshore platforms, and storage units—to secure supply.
This led to a surge in demand for:
- LNG carriers (for transporting natural gas)
- Offshore support vessels
- Floating production and storage units (FPSOs)
At the same time, shipyards were already operating near full capacity. This created a supply shortage, which pushed up vessel prices and charter rates. The above chart is tanker freight rates for oil. The rates have ballooned more than 80% in one month, this suggests how tight the market is.
With many ships rerouting, and countries demanding more reserves, we can only see short term demand rising. This will push such demands higher. Overall, Singapore’s marine companies benefited from both higher demand and limited supply, creating a strong upcycle in the industry.
Defence
- ST Engineering (SGX: S63)
The defence sector gained momentum as the conflict highlighted the importance of national security.
Countries around the world began increasing military spending, not just as a short-term reaction, but as part of a longer-term shift toward self-reliance and preparedness.
This led to increased demand for:
- Military equipment
- Maintenance and repair services
- Cybersecurity and digital defence systems
- Unmanned and autonomous technologies
Singapore’s defence industry is well-positioned in these areas, especially in engineering and maintenance services. As governments looked to strengthen their capabilities, defence companies benefited from new contracts and rising global demand.
Semiconductors
- AEM (SGX: AWX)
- UMS (SGX: 558)
- Micro-Mechanics (SGX: 5DD)
- Frencken (SGX: E28)
- ASTI Holdings (SGX: 575)
- Sunright (SGX:S71)
Despite the war, the semiconductor sector remained strong due to one major driver: artificial intelligence (AI).
Global tech companies are investing heavily in AI data centers, which require advanced chips. This demand has created a multi-year growth trend that is strong enough to offset short-term geopolitical disruptions.
Singapore’s semiconductor companies benefited because they supply equipment, components, and services needed to produce these advanced chips.
However, there are risks:
- Semiconductor production depends heavily on energy, and disruptions to oil and gas supply can affect manufacturing
- Taiwan, which produces most of the world’s advanced chips, relies on imported energy and helium to make chips—making it vulnerable to supply shocks
With that, the critical distinction we need to make is, how many of these businesses are price setters. This will allow them to maintain margins while input price rise and fall in volume sales due to limited production capacity. AEM and UMS have mentioned that they have multi year engagements with key customers. These may provide some room for comfort for investors looking to stay in the trade amidst the ongoing geopolitics.
Why Singapore Stayed Strong
While many global markets struggled, Singapore held up well for two main reasons:
1. Safe Haven Status
Singapore is politically stable, neutral, and has a strong financial system. During times of crisis, investors move their money to safer places—and Singapore is one of them. With the Middle East caught in the war situation, wealth will likely flow into Singapore.
2. Strong Banking System
The stock market is heavily supported by major banks, which benefit from higher interest rates and steady capital inflows during uncertain times. They have low exposure to private credit and are rather prudent as some of them remain family owned.
Final Thoughts
The 2026 Middle East conflict showed that markets do not always move in the same direction. While fear and uncertainty caused many global stocks to fall, Singapore proved to be different.
Instead of declining, several sectors actually benefited from the crisis. Rising oil prices boosted palm oil and energy companies. Supply chain disruptions supported marine and offshore firms. Increased military spending lifted defence stocks. In a volatile world, money doesn’t disappear – it moves. And in this case, it moved toward stability and resilience.
Singapore turned a global crisis into a relative advantage.
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