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Escalating conflict in the Middle East is disrupting traffic through the Strait of Hormuz, one of the world’s key oil and gas chokepoints, pushing global prices higher and raising concerns even in Cambodia.
Officials say domestic fuel prices will continue to track international markets, while economists warn prolonged instability could drive inflation, strain exports and force Phnom Penh to navigate growing geopolitical pressure.
Tanker traffic through the Strait of Hormuz, a narrow passage at the mouth of the Persian Gulf through which about a fifth of the world’s oil passes, has ground to a halt after a widening war with Iran erupted on Saturday following strikes by the United States and Israel. Much of the oil that moves through the strait from major Gulf producers is bound for Asia.
After Iran attacked several ships in the strait and warned others against attempting to pass while insurers withdrew coverage, effectively closing the route, U.S. President Donald Trump said on Tuesday the U.S. development finance arm would provide political risk insurance and suggested the U.S. Navy could escort vessels.
Qatar also halted production of liquefied natural gas on Monday, equivalent to about 20% of global supply.
For Cambodia, which relies entirely on imported oil and gas because its offshore petroleum reserves remain undeveloped, prolonged volatility in global markets is expected to feed into domestic fuel prices.
Oil traders said Brent crude rose about 10% to roughly $80 a barrel in over-the-counter trading on Sunday. Analysts said prices could reach $100.
Cambodia’s Commerce Ministry spokesperson Pen Sovicheat said fuel prices in the country will rise in line with global markets. The conflict in the Middle East has already pushed global oil prices up between 5% and 25%, he said, adding that higher prices could contribute to inflationary pressure in Cambodia.
Cambodia’s imports of diesel, gasoline and combustion gas totaled nearly $220 million in January, a 1.6% increase from the same period last year, according to government data.
Singapore is Cambodia’s largest supplier of refined fuels after imports from Thailand were suspended in 2025 following border clashes between the two countries before a ceasefire was reached.
Vietnam, Malaysia, China and other countries also remain major sources of fuel, particularly LPG and other petroleum products delivered via river and sea routes.
In the latest 10-day pricing cycle, fuel prices in Cambodia rose by 100 riel per liter, about $0.03, for both gasoline and diesel, according to the Commerce Ministry. The ministry said it will continue monitoring international price fluctuations over the next 10 days.
To cushion the increase, the government said it will maintain a one-cent-per-liter subsidy and is working to secure stable fuel import sources despite some restrictions from partner countries.
“We will continue our oil import contracts with those countries even in difficult circumstances. We must maintain supply sources and ensure citizens have access to fuel at reasonable prices,” Sovicheat said.
He said Cambodia has at least one month of fuel reserves if imports are disrupted and urged consumers to conserve fuel and prioritize essential use amid instability.
Officials have not announced additional measures, but Cambodia’s fuel pricing mechanism typically adjusts retail prices in line with movements in the international market.
Sophal Ear, a Cambodian-American political economy expert and professor at Arizona State University, said Cambodia’s biggest risk from the war involving the U.S., Israel and Iran is disruption to energy supplies and shipping routes.
He said the country could face higher inflation, pressure on its current account and a weaker growth outlook depending on how long the conflict lasts.
On foreign policy, he said prolonged instability could sharpen strategic choices for Phnom Penh as it balances close ties with China while maintaining relations with the United States and ASEAN.
“The real question is whether it [Cambodia] uses this period to double down on a single patron or to quietly build a more diversified and resilient economic and diplomatic portfolio,” he said.
Cambodian economists have also raised concerns about broader economic impacts beyond oil and gas prices.
Ky Sereyvath, an economist at the Royal Academy of Cambodia, said Cambodia’s exports to Dubai and other Gulf states could be affected, along with tourist arrivals from the region.
Hong Vannak, an economist at the Institute of International Relations at the Royal Academy of Cambodia, urged the government and stakeholders to establish an urgent mechanism with oil importers and increase fuel reserves from one month to at least three months to ensure stable consumption and prices.
He warned that without swift action Cambodia could face a severe oil price shock.
“The problem is not immediate, but in the long run oil prices will rise and the impact will be greater. When oil prices rise, the cost of goods will also increase, so oil use that is not economically beneficial should be reduced,” he said.
