Middle East turmoil may redirect energy trade to Malaysia
Turmoil in the Middle East is reshaping global energy flows, and analysts say Malaysia could emerge as an alternative supplier
PETALING JAYA, Malaysia (MNTV) – Turmoil in the Middle East is reshaping global energy flows, and analysts say Malaysia could emerge as an alternative supplier as buyers seek to avoid disruptions around the Strait of Hormuz.
Iran’s de facto blockade of the strait — through which 20% to 30% of the world’s seaborne oil and liquefied natural gas passes daily — sent crude oil prices surging to $120 per barrel before easing to around $100.
While the spike has raised global concerns, Malaysia’s position as a net energy exporter could allow it to benefit from shifts in trade patterns.
MBSB Research said a 10% increase in average oil prices could translate to an approximate 8.1% rise in Malaysian government petroleum-related revenue.
More significantly, it said geopolitical tensions could redirect energy trade toward producers outside the Middle East. “As international buyers seek to mitigate their exposure to Middle Eastern supply disruptions, Malaysia’s oil becomes an alternative, likely driving a surge in export volumes.
This tailwind would significantly bolster Malaysia’s trade surplus,” it said.
The research house added that higher demand for the ringgit alongside stronger government finances from Petronas dividends could support the local currency, creating “a strong fundamental basis for the ringgit to strengthen.”
Finance Minister Amir Hamzah Azizan said Malaysia’s economic fundamentals provide flexibility in managing the fallout from rising energy prices. Bank Muamalat chief economist Afzanizam Rashid added that Malaysians are better positioned than many in the region due to government subsidies shielding consumers from global oil price volatility.
Under the BUDI 95 subsidy programme for RON95 petrol, Malaysia has the second lowest petrol price in ASEAN after Brunei.
Geopolitical instability could also boost tourism. MBSB noted that previous Middle East crises, such as the Arab Spring, led to increased arrivals from Gulf countries, and that wealthy travellers from the UAE and Saudi Arabia could reroute to Malaysia as a stable, Muslim-friendly destination, potentially boosting Visit Malaysia 2026.
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