Hong Kong firms face profit squeeze as US importers cut orders amid oil crisis

Hong Kong Firms Face Profit Squeeze Amid Oil Crisis

Despite the global oil crisis sparked by the ongoing Middle East conflict, Hong Kong’s business leaders are urging the government to strengthen ties with Central Asia and ASEAN nations to mitigate market risks. Jeffrey Lam Kin-fung, an Executive Council member, highlighted that US importers have significantly reduced orders and shifted to short-term contracts due to rising fuel costs, which is straining liquidity for local enterprises.

‘Orders are greatly affected, shifting from long-term to short-term, but costs have risen with no room to pass them on through price increases,’ Lam said. ‘The situation is unclear and will definitely impact the cash flow of Hong Kong small and medium-sized enterprises, so we cannot sit idly by.’

The Middle East conflict has entered its fourth week, with Iran sealing off the Strait of Hormuz and triggering a global oil crisis.