KUALA LUMPUR: Escalating tensions in the Middle East – particularly US-Israel military strikes on Iran – could increase dividend payouts from Petroliam Nasional Bhd (Petronas) and lift government coffers, but higher imports for refined petroleum products may offset much of the gain.
Economy Minister Akmal Nasrullah Mohd Nasir said oil prices have spiked as markets factor in potential supply disruptions.
“And this matters to us in Malaysia because LNG (liquefied natural gas), which Malaysia imports from Australia and other suppliers, is closely linked to global oil prices. So, any sudden increases can affect industrial energy costs, electricity generation, and household fuel expenditures.
“A key risk we must all watch is the Strait of Hormuz. Even a temporary closure or restriction of this vital energy transit chokepoint could sharply tighten supply, pushing up global crude and LNG prices, and creating higher risk premiums for energy imports,“ he said at the Oil & Gas, Services and Equipment 100 CEOs Forum 2026 today.
Akmal Nasrullah said the impact can be substantial on the domestic front, as Brent crude prices surge toward US$80-US$100 (RM314-RM394) per barrel.
For Malaysian businesses and the power sector, he said, this market scenario creates uncertainty on fuel costs, electricity pricing and overall energy security.
“That is why it is important to diversify our energy sources, strengthen domestic generation capacity, and accelerate renewable and transition technologies. In short, while Malaysia is well-positioned relative to some countries, these developments show that energy security is inseparable from economic resilience. It’s about preparing a system that can maintain reliable, affordable, and stable energy supplies even amid global volatility and high oil price scenarios.”
Malaysia is an exporter of crude oil and LNG, but it still imports refined petroleum products, leaving it exposed to global fuel price volatility.
Akmal Nasrullah said the government is maintaining its 2026 gross domestic product growth target of 4% to 4.5%, despite rising geopolitical risks. “I have remained consistent in my position. When performance was strong, there were calls to revise our 2026 targets upwards. However, we must now take into account the evolving geopolitical landscape.”
He highlighted that last year the government had maintained its growth projection of 4% to 4.8%, eventually surpassing expectations.
“Any necessary recalibration based purely on the data will ultimately be undertaken by Bank Negara Malaysia. At this juncture, however, we remain focused on our forward-looking growth targets for 2026.”
The minister said the current global volatility underscores the need for Malaysian OGSE firms to strengthen resilience and scale internationally.
“If we want Malaysian OGSE to expand its international footprint, we must move decisively from being traditional service providers to becoming technology-driven, low-carbon solution providers, export-ready, innovation-led, and capable of delivering complex projects to global standards.
“To achieve scale, strategic partnerships are no longer optional; they are the engines of scale.
“Whether through mergers, joint ventures, consortia, or structured alliances, we need stronger Malaysian entities able to bid bigger, deliver faster and build long-term positions in international markets,“ he added.
Akmal Nasrullah said the Ministry of Economy’s role is to provide the tailwind – a policy environment that supports scaling, investment, talent development and market access.
“Through MPRC (Malaysia Petroleum Resources Corporation), we are aligning priorities and strengthening delivery through the National OGSE Industry Blueprint 2021-2030, including initiatives under the 13th Malaysia Plan.
“Critically, the blueprint is designed as an ecosystem. The blueprint includes collaboration with key players – Petronas, Matrade, and OGSE industry associations – so that support is coordinated, practical, and aligned to industry needs,“ Akmal Nasrullah said.
The Sun Malaysia
