00:00When we look at how we can prepare or mitigate, what is Singapore doing to, perhaps in the near term,
00:08secure energy supplies?
00:10I mean, according to Bloomberg data, last year, almost half of our LNG shipments came from Qatar.
00:18What is it doing in the interim to replace those supplies?
00:24Well, let's start with, like I said, you're going to get more details in Parliament today, so I don't want
00:29to.
00:30You know, to run ahead of the announcements.
00:34But let's, so let's zoom back a bit and look at some, say, energy facts for Singapore.
00:42Do we have any oil and gas native to Singapore?
00:46Zero.
00:48How do we generate electricity?
00:51More than 95% of that is from natural gas.
00:55Where do we get our natural gas from?
00:57Well, before the last global financial crisis, you must, you may recall, we didn't even have a single LNG terminal.
01:07It was entirely piped and piped from our region.
01:12The big change is the LNG terminals.
01:16Before, the amount that we were getting from Qatar would have been zero without LNG.
01:22But with LNG terminals, in theory, you have access to the global market.
01:29What has changed from 2008 to today as far as the global production of energy is concerned?
01:38And most people have not yet figured out.
01:40From 1954 to about 2010, the world's largest importer of energy was the United States of America.
01:52After that, because of China's rise, and in particular manufacturing, China became the largest importer of energy since about 2010
02:02or thereabouts.
02:04But what has really flipped the switch is the shale revolution in the United States.
02:11And what President Trump said the other night, that America today produces more energy than Russia and Saudi Arabia combined.
02:22He happens to be right.
02:25Anyway, there is a global market for energy.
02:30Crude oil, natural gas.
02:35Liquified natural gas.
02:38And it is true that we can and we do import from around the world.
02:43If you ask Minister Tan Siling, he will mention Australia, he will mention Mozambique.
02:48But the key point is we will have to pay the full international going rate for crude oil and for
03:00LNG.
03:01So there are two aspects to your question.
03:03First is, can you get the physical stock that you need?
03:07The answer is yes, but full price.
03:13And that full price is likely to be high.
03:16And even if you look at the Straits of Hormuz, what concerns me is not just whether the tankers are
03:22getting through.
03:23I mean, your Bloomberg data will show that right now the tankers getting through are less than 10% of
03:28what it was pre-war.
03:30But that's not all, you see.
03:32Even if in 24 hours, the Straits of Hormuz is miraculously open, the fact is there has been damage to
03:40infrastructure, to LNG infrastructure, which will take months and even years to restore.
03:49So this global short form is sticky.
03:54It's not something that's going to be resolved in 24 hours.
03:57And then the other point is that once you get a significant rise, which you already have in energy prices,
04:06I think what central banks all over the world are going to be concerned about is the stickiness of inflation.
04:14Because from energy, you get to food, you get to transport, services.
04:21Even if you talk about AI, one key cost factor for AI is energy.
04:28So we are in a different trajectory, a completely different risk profile.
04:39And my message is be prepared.
04:44Amid this, Singapore is also seen as a country that's able to quickly adjust.
04:50It's been seen as a haven.
04:52But to your point about being prepared, being ready, that we are not immune to these external shocks, what would
05:02you say?
05:02We are not immune.
05:02So first, be prepared.
05:04Second, remember that we are not immune.
05:08But having said that, it doesn't mean we are without agency and that we don't have options and that we
05:17don't have some firepower.
05:18So it's a rupture with the U.S. as a catalyst.
05:23How would you assess the U.S. handling of the war so far?
05:28Unclear objectives, mixed messages?
05:31You're trying to make me give an undiplomatic answer.
05:36I think I have said about a week or so ago, I was disappointed that this war broke out.
05:45I didn't think it was necessary.
05:47I'm not convinced it is wise.
05:51And there have been questions raised on points of international law.
05:57But, you know, in diplomacy, the equivalent in investment terms is don't get distracted by sunk costs.
06:08It's a sunk cost.
06:10The question is, how do you respond now to what is happening?
06:16And assuming you take care of the downside, is there an upside available?
06:22What I don't want is to engage in short-term, you know, one-upmanship.
06:28You made a mistake, so I'm going to benefit.
06:30Or there's short-term flows of capital or even people relocating from one place to the other.
06:38Because the larger backdrop is that trouble anywhere in the world is bad news for all of us.
06:45We do not benefit by other people's travails.
06:51So don't get into that kind of game.
06:54Second, don't try to second-guess what the big powers and superpowers are.
06:59They have other options which a small city-state doesn't have.
07:03And they have other considerations.
07:05And in particular, there are other domestic political considerations,
07:08which, in fact, motivates the behaviour for countries on the international stage.
07:15So I don't get, you know, so I'm not into this.
07:18I find it unproductive to stick adjectives or engage in pejorative name-calling.
07:26It's unproductive.
07:29Our job is take the world as it is, take care of the downside, position ourselves well.
07:35Well, actually, I'm quite sure the markets are not fully pricing the worst-case scenario.
07:41How's that for a note of soberness?
07:46Because from where I sit and from where, and, you know, I travel extensively,
07:51extensively, or I met most of the cast on the global stage,
07:57I can think of a lot worse scenario.
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