STRUCTURAL IMPACT OF CRISIS<\/p>\n
Global energy supply chains have been disrupted by Iran’s blockade in the Strait of Hormuz, after the United States and Israel began the war against Iran on Feb 28.<\/p>\n
Member of Parliament Liang Eng Hwa (PAP-Bukit Panjang) asked the minister about structural changes to the economy wrought by the conflict, especially the damage dealt to oil and gas infrastructure.<\/p>\n
To this, Dr Tan said it was “premature” to make conclusions about the long-term impact, but that the crisis was likely to accelerate structural shifts that are already under way in the global economy.<\/p>\n
This refers to supply chain diversification, digitalisation, the adoption of artificial intelligence and the energy transition, he told parliament.<\/p>\n
While the crisis will test the resilience of economies, it also creates new opportunities for firms to transform, diversify and deepen their capabilities, he said.<\/p>\n
Energy has become an “existential” issue because of the need to power data centres for the compute required for AI.<\/p>\n
At the same time, there is an abundance of new discoveries in oil and gas, and developments in green energy sources are accelerating, he said.<\/p>\n
He pointed to Prime Minister Lawrence Wong’s recent commitment that Singapore will not restrict fuel exports amid the energy crisis.<\/p>\n