Hong Kong to see oil shocks and volatility from Middle East war

The government has been working to ensure stable energy supplies, says Hong Kong's leader John Lee

File photo: Hong Kong Chief Executive John Lee delivers his first annual policy address at the Legislative Council in Hong Kong, China Oct 19, 2022. REUTERS

Hong Kong's leader John Lee said he was "very concerned" about the rise in oil prices due to the US-Israeli war on Iran and that the financial hub, along with the rest of Asia, would see shocks and volatility due to the disruption of supply and oil prices.

Lee, speaking at a press conference on Tuesday, said the government was working to ensure stable energy supplies and would increase transparency of information related to supply and energy prices.

"There are, of course, risks because the conflict is creating disruption to the supply of oil," Lee said, adding that authorities were working to mitigate risks and monitor price fluctuations.

"The government has also been in touch with local airlines and also will be meeting fuel suppliers, petrol fuel suppliers, so as to ensure that they will know their social responsibility," Lee said.

As the conflict rattles businesses worldwide and drives oil prices higher, concerns over jet fuel costs and supplies are also weighing on airlines, with many raising fuel surcharges and some cutting flights.

Hong Kong's flag carrier Cathay Pacific Airways has extended its suspension of all flights from Hong Kong to Dubai in the United Arab Emirates, and Riyadh in Saudi Arabia until Mar 31.

Lee said despite the risks, the conflicts in the Middle East "highlighted the strengths of Hong Kong" and would create new opportunities for the Chinese territory.

"Investors and businesses looking for diversification at the same time looking for investment security will definitely look to Hong Kong."