Cambodia Faces Inflation Risks as Israel–Iran Conflict Pushes Oil Prices Higher

PHNOM PENH, Mar. 5 (KPT) – Cambodia is bracing for economic fallout as tensions escalate in the Middle East following a military confrontation between Israel and Iran. Economists warn the conflict could push up oil prices, disrupt exports and trigger inflationary pressures in the Kingdom.

Ky Sereyvath, a Cambodian economist specializing in macroeconomics and trade, said the war could affect Cambodia in three ways: rising fuel costs, export disruptions—particularly to Dubai—and broader inflation.

“The impact will be felt across households and businesses if oil prices continue to climb,” he noted.

The Ministry of Commerce reported retail gasoline prices rose by 100 riel per litre to 3,850 riel between March 1–10, while diesel climbed 50 riel to the same level.

International crude surged nearly $10 after Israeli and US strikes on Iranian targets disrupted regional oil flows.

Observers cautioned that a closure of the Strait of Hormuz, through which 20 percent of global oil passes, could send prices toward $100 per barrel. “If the conflict escalates, inflation will rise sharply,” said Chay Tech, a political geography and economics analyst.

Cambodia’s trade with the UAE, worth $74 million in exports last year, could also be affected. Garments, footwear, bags and natural rubber are among the key exports, while imports include minerals, plastics and synthetic rubber.

Commerce Secretary of State Pen Sovicheat said the government is preparing measures to shield households, including price adjustments if global benchmarks exceed $90 per barrel for gasoline and $100 for diesel.

“These measures aim to mitigate the impact on citizens as international oil prices fluctuate amid ongoing Middle East tensions,” he said.

Officials added that Cambodia’s broader economic strategy will also focus on diversifying energy sources and strengthening trade resilience to cushion against external shocks.