Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan's Live Interview with CNBC on the Sidelines of the Milken Asia Summit, Singapore, 7 October 2026

Sri Jegarajah (Anchor, CNBC): Dr Balakrishnan, let’s start with the Middle East. Nearly 40 attempts to broker an end to the US-Iran conflict. Is there a meaningful diplomatic off-ramp?

Minister for Foreign Affairs Dr Vivian Balakrishnan: Short answer, no. Not in the immediate, foreseeable future. That’s the first point. Second point is, however, something almost bizarre is occurring, because depending on who you speak to, the volume of oil traversing the Strait of Hormuz, or more importantly, the revenues earned by some of our Gulf partners, they claim exceed their pre-war revenues. The point is, oil is getting through, and in any case because the price is higher than pre-war, revenues are doing better than expected. Now, this is not to minimise the dangers. Right now, you’ve got problems in both the Strait of Hormuz and the Bab al Mandab, and that’s a dynamic and still evolving situation. But it’s very curious. If you shift your attention to Southeast Asia, you would have thought that at a time like this, with a hot war, energy prices rising or certainly being volatile, the economies here should be far more affected. But if you look at the first half of this year’s growth figures, Vietnam is galloping at 8%, Singapore was 6.1%, my neighbours Malaysia and Indonesia will probably come around 5%. So it’s almost schizoid; lots of things to worry about and yet the economy is chugging along quite well, including for some of our Gulf partners.

Sri Jegarajah: That’s plain to see, but the resiliency story is being tested on a number of fronts. Could the US midterm elections be the opportunity for a breakthrough, Minister?

Minister: The first point is that the US is not the major importer of oil from the Middle East now. This is a very different time from 1979 and 1980 – the First Tanker War. Secondly, the US now has larger production of oil and gas than Russia and Saudi Arabia combined. So that strategic economic fact is a complete reversal of the past. So, in a sense, when President Trump says, “Look, this is actually Asia’s problem”, he’s not completely wrong. The outcome of the midterm elections, I would be cautious about predicting a clear outcome. The standard analysis would be that high oil prices at the pump are bad, but I think there’s more to it than that story, and I wouldn’t be surprised by a surprise in the midterm elections.

Sri Jegarajah: Let’s just look at the geopolitical setup in closer detail in the Gulf region. Saudi Arabia is almost under constant attack. You mentioned the Bab al Mandab is constrained. Strait of Hormuz – yes, oil is finding a way, but there is still a battle for control over the Strait between Iran and the United States. Are we looking at an almost structural or a semi-permanent state of affairs where the risk premium in pricing across the supply chains is stubborn and intractable? And that feeds through to inflation?

Minister: There will certainly be a risk premium. I don’t think that’s going to go away, but it may not be as high as people make it out to be. The key question really is Iran’s stamina. Now, you can talk about tolls and fees, but from an Iranian point of view, it’s not about money because the right that they claim to impose tolls and fees, actually refers to their potential strategic dominance of the Gulf. Because the right to collect fees also means the right to determine who gets through or not, and in fact, this has got greatest leverage right now than even a potential nuclear weapon from an Iranian point of view. So the real strategic question is – will this be allowed to stand? Will America allow it? And how will the Gulf countries respond to it? I think there will be a lot of pushing and shoving in the next few months, and as I said, I don’t see a quick diplomatic off-ramp. But I don’t think America and the Gulf will accept this, will tolerate a situation where Iran has a veto right over transit through the Strait of Hormuz.

Sri Jegarajah: And where does Singapore stand in terms of never paying Iran’s shipping tolls through the Strait of Hormuz? Because isn’t the rubber hitting the road now, Minister, with global shipping lines facing catastrophic daily insurance costs?

Minister: This for us is an existential question, and it’s a matter of principle, matter of international law, and we –

Sri Jegarajah: So that position remains unchanged?

Minister: Absolutely. Our adherence to UNCLOS, the [United Nations] Convention on the Law of the Sea, the right of transit passage, which entails freedom of navigation and overflight through Straits Used for International Navigation – those for us are non-negotiable. The reason for that is not because we are taking sides in the Gulf, but because in our own neighbourhood, the Straits of Malacca and Singapore is even much narrower. It’s about two nautical miles, and far more trade flows through the Straits of Malacca and Singapore than even the Strait of Hormuz – this is essential to our role, to our economic performance, and therefore non-negotiable from our perspective.

Sri Jegarajah: Is this looking like a prolonged crisis and a quagmire that’s going to equal or drag on for as long as Russia-Ukraine has dragged on?

Minister: It’s going to drag on. Think of this as a low-grade fever that’s going to persist for months. The question therefore is resilience.

Sri Jegarajah: Months, if not years?

Minister: I don’t want to get into years, but certainly for the medium term. Therefore, the question is economic resilience. How are your supply chains? What are your alternatives? Are you able to afford higher energy prices? Are you able to deal with volatility? Do you have access to diversity of sources? If you look again at what we’ve been doing, we’ve been paying particular attention to the security of supplies. If you look at our agreements, say with Australia or with New Zealand and others – to secure the security of essential supplies.

Sri Jegarajah: Let’s talk about that, Minister. Singapore relies on imported LNG for 95% of its power. Has this vulnerability exposed, effectively, your hesitation on nuclear energy, and is domestic nuclear energy now a viable option for Singapore that you are actively looking at?

Minister: Let’s deal with it at two levels. The fact that we have an LNG terminal was made deliberately more than a decade ago in order to ensure that we had strategic options. Basically, LNG is a global commodity. You can get it from all over the world. It’s not just the Middle East, you can get it from Africa, you get it from South America, you can get it from Alaska and Canada. So that’s the first point. The second point is that we have been very, very careful to maintain sanctity of contract. In fact, a curious thing which has emerged is that we don’t have any oil and gas in Singapore, but we’re the world’s busiest bunkering port, the third largest oil trading hub, the sixth largest refining and petrochemical hub in the world. Not bad for a place with no oil and gas of our own. But, because of this hub status, the total volume of oil and gas and distillates and products being processed through Singapore far exceeds our own domestic consumption. This has given us – again, I don’t want to be complacent – but it’s given us some measure of a buffer. But a key point is, we must be prepared to pay full international price for energy and therefore, you’ll notice in our domestic policies, we don’t subsidise oil or gas or energy; we charge full rate. But, however, from a political perspective, we also ensure that less well-off families have cash, have a credit in their utility accounts, so that they can afford and will get through this, whatever happens.

Sri Jegarajah: And that really speaks to the affordability crisis, which is a global phenomenon at the moment. From a diversification point of view, is nuclear energy an option for Singapore?

Minister: That’s the second point, and the answer is, with today’s technology? No. Because the exclusion zone, if anything went wrong, would extend far beyond Singapore. So we have to look carefully – and I say very, very carefully – at other technologies. Smaller scale, modular scale, and our particular emphasis is on safety. That’s something which we have to look at seriously, but we have to look at it carefully and deliberately over the years to come. No hasty decisions.

Sri Jegarajah: Understood. Minister, at the United Nations, you warned that AI is advancing faster than our capacity to manage its existential risks. You called for global rules of the road. Given the rivalry between US and China, is a unified UN framework on AI safety actually enforceable, or are we heading towards a fractured, unsafe tech cold war?

Minister: It’s very, very difficult, but it doesn’t mean it is any less essential, and that’s why I called for a possible UN framework convention on AI safety. Let me give you our take from Singapore’s side. There’s no question this is a platform technology with enormous promise and also great peril. I think if you look at the headlines over the last few months, the proliferation of agents, the loss of control of autonomous agents, the potential for bad actors to misuse or abuse AI technologies, and the still to be processed social, economic, political impact on our societies of AIs – there’s no question that this is both risk and promise.

Sri Jegarajah: Is DPRK – North Korea – increasingly being seen, and increasingly responsible as a bad actor, originating cyber attacks on nation states and institutions?

Minister: I would not confine the definition of bad actors to state actors. You will also have a significant risk from non-state actors. We don’t even need to get into that. The risk is clear. The point, however, is that because of the rivalry between the two foremost countries at this, which are basically China and the US, because of the great financial incentives and payback for the leading companies, it’s very hard to get everyone to say, “Can we take a step back and put some brakes on?”. The analogy which I’ve given is that, actually, what Singapore hopes for is an acceleration of AI development, but just like an F1 car, to drive quickly, you need both a powerful engine and you need good brakes. Then, the moment your car gets onto the normal streets or crosses boundaries, you need a highway code, you need to decide whether you are going to drive on the left or right, and red lights mean the same thing in all the capitals. So that’s where we are coming from.

The second point, at a more domestic level, beyond the acceleration of AI globally, is that we want to apply it in a way across our economy that increases productivity. This is crucial because you don’t need to be developing frontier models, but can you improve your economy workflow by workflow to increase productivity, improve wages, and to enhance your competitiveness? That’s what we’re focused on. The third area is to get our societies to adapt to this new technology. That’s the social, political, and all the other compromises and discussions.

Sri Jegarajah: Exactly, that’s the social compact.

Minister: Yes, absolutely.

Sri Jegarajah: The concern is that the AI bubble is going to burst, and AI and tech has been such a big driver of Singapore’s economic success story and exports. Do you fear a burst in the AI bubble, and what could be the ripple effects for Singapore?

Minister: As I started this session, I said I have been surprised at the resilience, and in fact, the performance of our economy. Considering a world where globalisation, the disruption of supply chains, wars, the paralysis in the WTO – we were very, very worried. And yet here we are at 6.1%. Why? I think AI is a big part of why our economies in Southeast Asia are doing well despite all these headwinds.

Now, as a person with public responsibilities, you always have to worry most when you are apparently doing better than what you had projected. If you look at the American stock market, the S&P 500 or any metric of market shares – I think last night the S&P 500 reached a new record. But if you drill through that, a big chunk of that is due to a handful of companies who are the AI majors. You can’t help thinking about the last industrial revolution. You had a similar burst of industrial capacity and even market capitalisation for railroads, for electricity, for steel. I personally believe we are entering another gilded age. There will be greater inequality accruing to those who own and master the technology. But we also know from gilded ages, you can also get bubbles and you need to be aware. Never, never believe this time is different.

Sri Jegarajah: Yes. Especially in a higher rates environment potentially. Dr Vivian, it’s been a fascinating conversation. I wish we had more time, but we have to leave it there. Thank you very much indeed, as always.

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MINISTRY OF FOREIGN AFFAIRS

SINGAPORE

7 OCTOBER 2026