Sri Lanka’s fragile tourism recovery is facing renewed uncertainty as the escalating Gulf conflict begins to disrupt travel flows, with early signs pointing to a sharp decline in arrivals and earnings. Industry stakeholders warn that the impact is already visible, particularly due to the country’s heavy reliance on Middle Eastern transit hubs.

According to the Sri Lanka Inbound Tour Operators Association, nearly 30% of tourists arriving in Sri Lanka depend on connections through Middle Eastern airports. With airspace disruptions, flight cancellations, and rising aviation fuel costs linked to tensions around the Strait of Hormuz, this dependency has become a critical vulnerability.

Tourism officials confirm the downturn. Ruwan Ranasinghe stated that arrivals via the Middle East have dropped by 25–30% in recent weeks. This decline is not limited to Gulf-origin travellers; it also affects European tourists who rely heavily on transit routes through hubs like Dubai and Doha.

The result is a ripple effect across the tourism value chain. Hotels, tour operators, and transport providers are already reporting cancellations, particularly for March bookings. Industry estimates suggest that even a short-term 20–30% drop in arrivals could translate into millions of dollars in lost revenue, given that Sri Lanka typically earns over $150–200 million monthly from tourism during peak periods.

However, the crisis extends beyond immediate cancellations. Rising global oil prices—now exceeding $100 per barrel are pushing up airfares, making long-haul travel more expensive and potentially dampening global travel demand. This could slow Sri Lanka’s tourism growth trajectory well into late 2026.

In response, industry leaders are urging a rapid strategic shift. Strengthening direct connectivity with regional markets such as India, China, and Australia is seen as a critical step to offset losses from disrupted long-haul routes. There are also calls for temporary incentives to attract airlines from non-conflict regions, including reduced airport charges and fuel concessions.

The Government has moved to cushion operational challenges by proposing a dedicated fuel access system for tourism operators, building on mechanisms used during the Sri Lankan economic crisis 2022–2023. This aims to ensure uninterrupted services despite global supply pressures.

However, analysts warn that speed is crucial. Competing destinations in Asia are likely to capitalise on the disruption by aggressively targeting the same pool of travellers.

While Sri Lanka’s tourism sector has proven resilient in the past, its dependence on external transit routes leaves it exposed. Unless swift diversification measures are implemented, the current geopolitical shock could significantly derail the industry’s recovery momentum.

The reintroduction of Sri Lanka’s QR-based fuel rationing system has revealed a deeper structural problem: not just technical glitches, but a fragile digital infrastructure vulnerable to misuse, inefficiency, and public distrust.

Initially launched during the Sri Lankan economic crisis 2022–2023, the National Fuel Pass was praised for bringing order to chaotic fuel queues. Today, however, its revival is marred by systemic weaknesses that threaten its effectiveness.

At the core of the problem lies poor data management. Many motorists report that their National Identity Card numbers remain linked to outdated vehicle records, preventing them from registering newly acquired vehicles. In some cases, the system assigns incorrect fuel quotas altogether—clear evidence that backend databases have not been properly cleaned or updated.

This is compounded by accessibility failures. Users frequently encounter messages stating that the system is “temporarily unavailable,” while attempts to seek help via official channels often go unanswered. The result is a digital bottleneck that mirrors the physical queues forming at fuel stations.

Adding to the crisis is the rise of fraudulent platforms. Scammers have begun replicating the official fuel pass website, tricking users into submitting sensitive personal information. According to warnings from the Ceylon Petroleum Corporation, these fake systems can generate invalid QR codes, effectively locking genuine users out of the fuel supply chain.

Meanwhile, external pressures continue to mount. Global oil prices have surged by over 40% amid geopolitical tensions, increasing the cost of imports and reinforcing the need for strict fuel management. However, a rationing system that cannot reliably identify users risks undermining its own purpose.

To restore confidence and functionality, immediate reforms are essential. Authorities should deploy a secure, single verified platform with two-factor authentication to prevent fraud. A nationwide data-cleansing initiative must be undertaken, integrating records from vehicle registration authorities, telecom providers, and national ID databases.

Additionally, offline solutions are crucial. Fuel stations should be equipped with the ability to verify identity documents and issue temporary quotas, ensuring that technical failures do not translate into denied access.

Public communication must also improve. Clear guidelines, real-time system status updates, and awareness campaigns about fake websites can significantly reduce confusion and vulnerability.

Ultimately, the success of the fuel QR system depends not just on policy, but on execution. Without fixing its digital backbone, Sri Lanka risks turning a necessary control mechanism into another layer of crisis.

Sri Lanka’s tea export sector is facing mounting logistical and market challenges as the Gulf conflict disrupts trade flows, raising questions about the accuracy of official reassurances. Comments by Mangala Wijesinghe highlight the widening scope of the crisis, extending beyond tea to broader export systems.

A key vulnerability lies in Sri Lanka’s reliance on the Middle East, which accounts for roughly 35–52% of tea demand depending on the measure used. In 2025, exports of tea to the region were valued at approximately $550–$600 million, forming a critical pillar of the country’s total tea export earnings.

Wijesinghe pointed out that disruptions are not limited to demand but also affect logistics infrastructure. Dubai, a major transit hub for Sri Lankan exports, has been impacted by regional instability, including tensions involving the Islamic Revolutionary Guard Corps. This has complicated shipment flows and increased reliance on alternative, often costlier, routes.

While some exports particularly perishable goodshave shifted to air freight, this is not a viable large-scale solution for tea due to cost constraints. Instead, exporters are forced to absorb rising shipping expenses and navigate unpredictable delivery timelines.

The Tea Board’s assertion that losses cannot yet be estimated contrasts with broader trade data. Given Sri Lanka’s average monthly tea export revenue of around $100–110 million, even partial disruptions could lead to weekly losses in the range of $8–12 million. This suggests that the widely reported figures, though debated, are not implausible.

Furthermore, inconsistencies emerge in official statistics. Claims that 52% of exports go to the Middle East align with historical trends, but the simultaneous assertion that the region accounts for only 35% of demand indicates a lack of clarity in measurement—whether by volume, value, or market segmentation.

There are also early warning signs within the auction system. While overall demand has held steady, price declines in Iran-focused tea grades and increased unsold quantities reflect weakening buyer participation. These indicators often precede broader market downturns.

The situation underscores a deeper structural issue: Sri Lanka’s heavy dependence on a narrow set of export markets and shipping routes. With both the Strait of Hormuz and Suez Canal under threat, the industry faces a dual shock demand-side contraction and supply-chain disruption.

Ultimately, while officials urge caution in interpreting loss figures, the available data points to a significant and growing impact. Without diversification of markets and logistics strategies, Sri Lanka’s tea industry may face prolonged instability in the months ahead.

Health sector trade unions have raised concerns over the government’s recent measures, calling for holiday allowances and a dedicated fuel quota to help maintain essential healthcare services.

Co-convener of the Health Services Trade Union Alliance, Ravi Kumudesh, said health workers should receive proper compensation if they are required to report for duty on designated public holidays.

“If we are required to work on a holiday such as Wednesday, the government must pay the relevant holiday allowance,” he said.

Kumudesh also stressed the need for a separate fuel allocation mechanism for the health sector, noting that uninterrupted healthcare services cannot be maintained without ensuring easy access to fuel for staff.

“If healthcare is considered an essential service, then the staff delivering it must also be treated as essential. A proper fuel quota and a convenient system to obtain fuel must be introduced,” he said.

He also questioned the rationale behind providing the same fuel quota for three-wheelers and private vehicles, while expecting health workers to continue delivering critical services.

Kumudesh further criticised the decision to declare a holiday for most sectors while expecting the health sector to function as usual, questioning whether authorities assume patients would not require medical care on those days.

The trade union representative warned that if the government continues to expect health workers to work on holidays without additional benefits, it must take responsibility to provide appropriate allowances without delay.

A special discussion has been held to examine measures required to ensure the uninterrupted operation of airline services amid the ongoing fuel crisis linked to the Middle East conflict.

The meeting was chaired by Deputy Minister of Ports and Civil Aviation Janith Ruwan Kodithuwakku and took place at the Civil Aviation Authority (CAA) premises.

Also in attendance were Secretary to the Ministry of Ports and Civil Aviation W.W.S. Mangala, along with the Chairman and Director General of the CAA and several senior ministry officials.

During the discussion, officials focused on the current levels of aviation fuel reserves and the need for their efficient management.

Attention was also given to identifying forward-looking measures required to maintain uninterrupted airline operations despite the prevailing challenges.

In light of the situation, emphasis was placed on how the Civil Aviation Authority can manage fuel consumption effectively while ensuring the continuity of airline services without disruption.

The United States has commenced the transfer of 10 TH-57 Sea Ranger helicopters to the Sri Lanka Air Force (SLAF) under a bilateral cooperation programme.

The Sri Lankan Embassy in Washington D.C. confirmed that the helicopters, provided as a donation, have departed the United States for Sri Lanka.

The aircraft are expected to enhance the SLAF’s capabilities in training, surveillance and operational support.

The TH-57 Sea Ranger, a military variant of the Bell 206B-3 Jet Ranger, has been in service with the United States Navy and other U.S. forces since 1968.

U.S. officials described the transfer as a milestone in defence cooperation between the two countries, noting that it would strengthen regional security, disaster preparedness and humanitarian response capabilities.

The International Atomic Energy Agency (IAEA) says Iran has reported that a projectile struck near the Bushehr Nuclear Power Plant in the country’s southwest on Tuesday evening.

In a statement, the UN nuclear watchdog said no damage to the facility or injuries to staff were reported. IAEA Director General Rafael Grossi reiterated his call for maximum restraint to avoid the risk of a nuclear incident amid the ongoing conflict.

Meanwhile, Iran has confirmed the death of Ali Larijani, Secretary of the Supreme National Security Council, who was killed in an attack earlier this week.

In an official statement, the Council said Larijani was “martyred” following a lifetime of public service, adding that he died alongside several others, including his son and members of his security detail.

Israeli Defense Minister Israel Katz had earlier claimed that Larijani was “eliminated” on Monday night.

Iranian authorities also confirmed that Gholamreza Soleimani, head of the Basij paramilitary force, was killed in what was described as a “terrorist attack by the American-Zionist enemy.”

Funeral ceremonies for both Larijani and Soleimani are scheduled to be held on Wednesday, according to Iranian media.

Iranian President Masoud Pezeshkian expressed deep sorrow over Larijani’s death, describing him as a leader marked by insight, foresight, and dedication, and acknowledged that his loss would be difficult to replace.

The government has decided to grant a weekly holiday every Wednesday to public sector employees starting today (18), until further notice, due to ongoing fuel supply challenges.

Commissioner General of Essential Services Prabath Chandrakeerthi said the holiday will also apply to schools, universities, and the judicial sector.

Authorities have further requested that state-approved schools and private tuition classes suspend activities on Wednesdays.

However, the directive does not apply to essential services, including healthcare, ports, water supply, and electricity, which will continue to operate as usual.

Meanwhile, the Department of Railways announced that only trains operating on a Saturday schedule will run today in view of the special holiday.

Accordingly:

• 29 trains will operate on the main line
• 17 trains on the upcountry line
• 33 trains on the coastal line
• 5 trains on the Kelani Valley line
• 9 trains on the Puttalam line
• 6 trains on the Batticaloa and Trincomalee lines

The Sri Lanka Transport Board (SLTB) stated that bus services will continue islandwide, with some schedules adjusted where necessary. Authorities said buses will be deployed based on passenger demand.

Showers or thundershowers will occur at several places in the most parts of the island after 2.00 pm. 

Fairly heavy showers above 50 mm can be expected at some places in Central, Sabaragamuwa, Southern and Uva provinces and in Anuradhapura district.

A few showers may occur over the eastern coastal areas during the morning.

Misty conditions can be expected at some places in Central, Sabaragamuwa, North-western and Uva provinces and in Galle, Matara, Anuradhapura and Kaluthara districts during the early hours of the morning.

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.