KUALA LUMPUR: Malaysia remains in a relatively comfortable position as a net energy exporter despite the recent surge in oil prices triggered by escalating tensions involving the United States, Iran and the wider Middle East.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the growing conflict in the region could tighten global oil supply and push prices higher.
“Today, Brent crude crossed US$115 (RM456) per barrel. But at the moment, we are in a reasonable position,” he told reporters at the Second Asean Banking and Finance Summit organised by the KSI Strategic Institute for Asia Pacific today.
He noted that Malaysia’s status as a net energy exporter means that higher oil prices can also bring positive spillovers to the domestic economy. “We must remember that Malaysia is a net energy exporter, so higher oil prices also translate into positive effects for the economy.”
However, Amir Hamzah said it is still too early to say whether stronger oil prices could lead to a higher dividend from Petroliam Nasional Bhd to the government. “This is still early days. The key priority for us is to ensure supply remains secure.”
He added that Malaysia’s oil and gas supply situation remains stable for now, with no immediate signs of disruption to the domestic market.
While prices could continue to climb, supply conditions remain manageable, Amir Hamzah said. “Prices may trend higher, but from a supply standpoint, we are in a comfortable position. The same applies to oil, so we do not foresee any disruptions to the market at this point.”
Amir Hamzah reiterated that the government intends to keep the retail price of RON95 petrol at RM1.99 per litre for the time being.
“As Prime Minister Datuk Seri Anwar Ibrahim has said, we will continue to maintain the RON95 price at RM1.99 as we still have the capacity to do so at this stage. He also indicated that the government will try to hold the price at that level for at least the next two months, after which we will reassess the situation.”
Malaysia’s balanced oil and gas supply position, together with a strong economic starting point this year, gives the country some buffer against external shocks, Amir Hamzah said. “But if this turns into a very prolonged crisis, then we will review the situation at that point. The key thing to remember is that Malaysia’s economy started the year on a very strong footing.”
He added that the economic outlook for the first quarter is expected to remain positive, supported by momentum carried over from last year.
“I think we will see a good first quarter because of the tailwinds from last year. Hopefully, if cooler heads prevail and we reach a diplomatic solution, then we should be able to manage this situation well,” the minister said.
Amir Hamzah said the government hopes the Middle East conflict will eventually be resolved through diplomacy to avoid prolonged economic pressure. “We all hope the crisis in the Middle East will find a fair resolution in the not-too-distant future. Hopefully, over time, the situation will ease, and that will gradually remove some of the pressure.”
The duration of the conflict will ultimately determine how much it affects borrowing costs and inflation, Amir Hamzah said. “The key question is how long this conflict will last. We all hope for a quick resolution so the economic transmission will not be too deep or prolonged. For now, the country is managing the situation well.”
