The government is considering creating strategic petroleum reserves to bolster long-term energy security following global supply disruptions.
KUALA LUMPUR: The government is studying a proposal to create strategic petroleum reserves as part of long-term energy security planning.
Deputy Economy Minister Datuk Mohd Shahar Abdullah said the assessment follows global supply concerns, including a recent 48-day closure of the Strait of Hormuz.
“The matter related to strategic reserves is indeed being looked at by the government, especially in assessing long-term needs following the crisis that has occurred,” he said on Bernama TV’s Ruang Bicara programme. He noted the strait, handling 20% of global oil trade, has now reopened after US and Iranian confirmation.
Mohd Shahar cautioned that reopening the route would not immediately stabilise oil prices due to refinery damage. He stated recovery would take four to six months for Middle Eastern production facilities to return to full operation.
The disruption exposed structural weaknesses in Malaysia’s energy landscape, particularly increasing reliance on imports. Malaysia has shifted from a net exporter to a net importer due to declining domestic production and rising consumption.
Demand is estimated at 800,000 barrels per day compared to production of 400,000 barrels per day. “This supply gap makes us more vulnerable to external shocks, and long-term measures such as strategic reserves and diversification of supply sources need to be given serious attention,” he said.
Mohd Shahar also commented on the economy’s projected 5.3% growth for the first quarter of 2026. He said this growth would increase international confidence in Malaysia as a strategic investment location.
