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Sri Lanka is closely monitoring the escalating tensions between Israel and Iran, with government sources warning of serious economic implications if the conflict worsens.
A senior official from the Foreign Ministry stated that Sri Lanka’s economy — already in recovery — could suffer significantly if instability continues in the Middle East.
The most immediate threat is the potential surge in global fuel prices, as Sri Lanka is entirely dependent on imported petroleum. Following Israel’s recent strike on Iran, Brent crude prices spiked over 10%, reaching their highest point since January, though prices have slightly settled since.
According to the BBC, traders fear that a full-blown conflict could disrupt oil supplies from the energy-rich region — triggering a ripple effect for countries like Sri Lanka.
The situation also puts migrant remittances at risk. A significant portion of Sri Lanka’s foreign income comes from workers based in Middle Eastern countries. Should the crisis escalate, their employment could be affected.
Moreover, key export sectors like tea could also suffer due to declining trade confidence and logistical disruptions in the region.
“If this tension eases within two to three weeks, the impact may be manageable. But a prolonged crisis will certainly take a toll,” the official warned.
