Global Energy Crisis: Why Singapore is Relatively Unscathed-Part 3

 Part 3: Vulnerabilities: Sulfuric acid, Helium, and PM Wong’s Qatar trip

Oil and gas are not only fuels. Processing them yields by-products that modern industry cannot do without, and the Gulf is a dominant supplier of several. Three matter especially for Singapore: Sulphur, Sulphuric Acid, Helium

What they are used for in Singapore

• Sulphur. Mostly a by-product rather than a raw material here. Singapore's refineries must strip sulphur out of crude to meet clean-fuel and low-sulphur ship-fuel rules, and recover it as elemental sulphur. Its main industrial use is as the feedstock for sulphuric acid; it is also used in rubber and specialty chemicals.

• Sulphuric acid. Ultra-pure "electronic-grade" acid is used in wafer fabs to strip photoresist and clean wafers between hundreds of process steps. Ordinary grades are used in chemical manufacturing on Jurong Island, in metal finishing and plating for electronics and chip packaging, and to control acidity in industrial water and wastewater treatment.

• Helium. In wafer fabs, helium cools wafers during etching and deposition, serves as an inert carrier gas, and keeps process chambers ultra-clean. In chip packaging and testing it is the standard gas for leak-testing sealed packages and vacuum equipment. Hospitals use liquid helium to cool MRI magnets, and it is also used in fibre-optic production and specialist welding.

Sulphur and sulphuric acid: a squeeze Singapore mostly escapes

Globally the shock has been severe. The Gulf, which must strip sulphur from its sour oil and gas, is the world's largest sulphur exporter. By April, global sulphur exports had fallen 45% as cargoes sat trapped behind the strait, and China then banned exports of sulphuric acid. In the US Gulf, the acid price jumped from US$155 a tonne before the war to about US$400 in May.

Singapore is far less exposed than most, for three reasons.

• It makes its own sulphur. Every refinery processing high-sulphur crude produces sulphur as a by-product. ExxonMobil's Jurong Island refinery has in recent years switched to buying only high-sulphur crude. So Singapore is a sulphur producer, not a sulphur importer.

• It does not use acid in bulk. More than half of the world's sulphuric acid goes into phosphate fertiliser, and much of the rest into leaching copper, nickel and cobalt from ore. Singapore has no large farms, fertiliser plants or metal smelters, so it has no heavy demand that a shortage could choke.

• What it does use is high-value. The electronic-grade acid used by fabs is a small-volume specialty product. Even a large percentage price rise is a tiny share of the value of a finished chip, so chipmakers can outbid other buyers.

Where Singapore will feel it is later and indirectly, through food. Singapore imports more than 90% of its food, and dearer fertiliser and freight work their way onto supermarket shelves over months, not weeks.

Helium: Singapore's most serious material exposure

Helium is the one by-product that genuinely worries Singapore's industry. Qatar's Ras Laffan produces roughly a third of the world's helium, and it has been offline or damaged since early March. Russia added export controls in April, and US producers have little spare capacity. Some Asian chipmakers were receiving only half their normal helium volumes by June, and prices reportedly rose about 50% in the first weeks.

Singapore's exposure is large. The country makes about a tenth of the world's semiconductors and about a fifth of global chipmaking equipment, it has no domestic helium production, and the Home Affairs Minister named helium in April as one of the critical supplies Singapore can no longer rely on in the usual way.

So far, Singapore has coped in four ways.

• Paying more rather than producing less. Businesses report higher operating costs for helium, but output has not fallen. Electronics production rose 28.5% year on year in August, and the electronics purchasing managers' index in September was at its strongest since January 2018, carried by AI-chip demand.

• Being first in the queue. When helium is scarce, industrial gas suppliers allocate it to chipmaking and hospitals ahead of balloons, welding and other uses. Singapore's fabs belong to that priority tier.

• A partly American supply chain. Helium comes mainly from the United States and Qatar. Many of Singapore's fabs are run by US-headquartered companies whose gas suppliers can draw on American sources, which softens the loss of Qatari volumes.

• Recycling, a gap now being closed. Fewer than half of Singapore's fabs have helium recycling systems, compared with more than 70% in Japan and Taiwan. Industry analysts are urging Singapore to treat helium as a strategic input, expand reclaim systems and pre-qualify alternative supply routes.

The risk has not gone away. Liquid helium can only be stored for roughly 45 days before it boils off, so it cannot be stockpiled like oil. If Ras Laffan stays down for years, as QatarEnergy's damage reports suggest it might, helium could become a binding constraint on Singapore's chip output rather than just a cost.

The chemical industry: the real casualty

The sector that has truly suffered is not chips but chemicals. Jurong Island's petrochemical plants depend on naphtha and other feedstocks from the refineries and from the Gulf. In March, PCS, Aster and several downstream plants declared force majeure. Rising feedstock and energy costs have squeezed margins since, and chemicals output was 12.7% lower in August than a year earlier, even as overall manufacturing grew 15.4%.

Not immune: what Singaporeans are paying

Singapore is cushioned, not insulated. Households pay world prices for fuel, and the bills are real.

RON 95 petrol at the major brands is S$3.57 a litre, about 25% above its pre-war price. Diesel at S$4.07 is now dearer than petrol, a first for Singapore, which matters for lorries, buses and delivery costs. Air fares have risen as jet fuel prices doubled, and ride-hailing operators added fuel surcharges.

The household electricity tariff jumped 17% in the third quarter, then eased 10% for October to December. Because tariffs are set from gas prices in the previous quarter, September's renewed spike in global fuel prices is likely to push tariffs up again in early 2027, as SP Group has already warned.

What could still go wrong

• A longer or wider war. The minister said disruption to domestic energy supply cannot be ruled out if more suppliers fail, although he called it a low-probability scenario.

• The Red Sea. Houthi attacks on Saudi facilities and tankers threaten the main route around Hormuz.

• Helium. It cannot be stockpiled, and the loss of Qatari supply may last years.

• Food. Fertiliser and freight costs feed into food prices with a lag of months.

• Lasting damage. Even if Hormuz reopens fully, repairs to Gulf facilities such as Ras Laffan will take years, so prices may stay high long after the fighting stops.

The lesson

A small country with no natural resources cannot be self-sufficient, so Singapore made itself indispensable instead: a place where the world's energy flows meet. In a crisis, being needed by your suppliers turns out to be one of the best stockpiles of all. The question this war poses is whether that strategy can stretch to helium and the other specialty materials that Singapore's high-tech future now depends on.