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GLOBAL concerns over oil supply disruptions continue to dominate market sentiment as tensions between the United States and Iran keep energy markets on edge, with analysts cautioning that fuel prices are likely to remain elevated in the near term.
Despite the possibility of diplomatic negotiations progressing or stalling, analysts say the global oil supply outlook remains fragile due to ongoing geopolitical uncertainty and the risk of continued disruptions to key infrastructure and shipping routes, particularly in strategic corridors such as the Strait of Hormuz.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the most favourable outcome would be a negotiated settlement and the reopening of critical energy shipping lanes.
“If the war ends, the main concern will certainly be that fuel prices remain high and that stock levels, which are currently expected to last for about two months, are sufficient.
“If this is the scenario, it will require a change in the way economic activities are carried out. The priority is for the public and businesses to conserve fuel usage,” Berita Harian quoted him saying today.
He was commenting on Malaysia’s preparedness following the expiry of a two-week ceasefire between the United States and Iran.
Afzanizam added that the government, through the National Economic Action Council (MTEN), is expected to have already developed contingency scenarios to manage the economic fallout from the Middle East conflict.
He also pointed to the need for greater adoption of working-from-home arrangements, although he noted that current traffic patterns suggest uptake remains inconsistent.
In addition, he said Malaysia should continue accelerating the transition towards electric vehicles and solar energy to reduce reliance on fossil fuels, while not ruling out the possibility of additional incentives if geopolitical risks persist.
Meanwhile, MBSB Research warned that sustained high oil prices combined with ongoing geopolitical tensions could drag Malaysia’s economic growth to between 3.8 per cent and 4.0 per cent, below its baseline projection of 4.2 per cent.
It said the downgrade reflects weaker private consumption amid inflationary pressures linked to developments in the Middle East, which are weighing on both consumer and business sentiment.
The research house added that labour market conditions could come under pressure as slower activity in services and export-oriented industries, which are sensitive to volatile energy prices, dampens overall demand.
“While domestic activity may be supported by a stable labour market, wage adjustments and government cash transfers, the tourism sector remains exposed to higher jet fuel costs and reduced flight capacity,” it said.
MBSB Research also noted that the electrical and electronics sector may offer some resilience, supported by ongoing technology upgrade cycles and a potential recovery in mining-related exports.
However, it cautioned that the outlook remains uncertain amid escalating global trade tensions and the risk of a broad-based 15 per cent tariff imposed by the United States.
“If the ongoing investigation (following allegations of unfair trade practices and structural overcapacity in the manufacturing sector) results in adverse findings, the imposition of countervailing duties will affect Malaysia’s industrial outlook for the year,” it added.
On a global front, US President Donald Trump is considering extending the Jones Act waiver, which allows foreign-flagged cargo ships to move fuel and other goods between domestic ports, Axios reported on Tuesday, citing U.S. officials.
Trump waived Jones Act limitations for 60 days starting March 17, hoping the move would help tame the surge in fuel prices caused by the Iran war by increasing shipments from the U.S. Gulf Coast to other coastal markets in the country. - April 22, 2026