Malaysia’s diplomatic success in securing a ship’s passage won’t immediately lower domestic fuel prices, as global market risks and costs keep pressure on consumers.
PETALING JAYA: Malaysians may have breathed a sigh of relief after one of seven Malaysian-owned commercial vessels stranded in the Strait of Hormuz was granted safe passage earlier this week. But experts caution that domestic petrol and oil prices are unlikely to drop immediately.
Prime Minister Datuk Seri Anwar Ibrahim has assured that Malaysia has sufficient petroleum supply to withstand global energy shocks in the short term, with no immediate risk of disruption at least until June.
However, Centre for Market Education CEO and economist Carmelo Ferlito warned that supply stability does not automatically translate into lower consumer prices.
“The prime minister’s statement essentially refers to physical availability, not necessarily price stability. Malaysia is unlikely to face shortages or rationing in the short term.
“But having adequate supply does not mean domestic fuel prices will fall, because prices are shaped not only by availability but by global market conditions and expectations,” he said.
Ferlito explained that oil and petrol prices remain elevated despite the safe passage of Malaysian vessels because the global oil market is forward-looking and sensitive to risk.
“Prices reflect expectations about future disruptions, not only current flows. The Strait of Hormuz remains a critical chokepoint and even temporary tensions could push prices higher.
“This uncertainty is priced into oil through risk premiums, regardless of whether specific shipments eventually pass safely,” he said.
He also highlighted the role of maritime costs.
“Geopolitical tensions increase insurance premiums, freight rates and security costs, all embedded into the final price of oil and refined products. These costs are significant and persist as long as uncertainty remains in the region.”
Ferlito stressed that Malaysia operates within an integrated global energy market.
“Even with stable domestic supply, prices are influenced by international benchmarks. Local developments – such as the release of Malaysian ships – have very limited impact on global pricing, and consequently on domestic prices.”
The ripple effect extends beyond fuel.
“Energy costs feed into production chains. Higher oil prices, whether due to real scarcity or perceived risk, affect transportation, food, and other goods. Adjustments are gradual but unavoidable,” he added.
From a geopolitical angle, International Islamic University Malaysia international relations expert Assoc Prof Dr Mohd Yazid Zul Kepli said Malaysia’s diplomacy was key in securing the vessels’ release.
“Malaysia’s role demonstrates effective protection of national shipping, strengthens its image as a constructive regional actor and shows the practical value of maintaining functional relations with all parties, including Iran, during a crisis,” he said.
Mohd Yazid added that Malaysia’s neutral but friendly stance with Iran allowed it to negotiate “de-escalatory, case-specific solutions” for its vessels, unlike the confrontational approaches taken elsewhere.
“By securing safe passage through diplomacy rather than confrontation, Malaysia appears capable of protecting its shipping interests through measured statecraft in one of the world’s most sensitive maritime chokepoints.”
He added that the incident could enhance Malaysia’s reputation in global maritime security and open doors for future trade or energy discussions with Iran.
“The longer-term impact will depend on whether Malaysia can maintain its neutral posture while retaining confidence among Gulf partners, major energy suppliers and other maritime stakeholders.”
Iran’s statement that it “does not forget its friends” reinforces Malaysia’s consistent approach of acting fairly and neutrally, boosting its credibility in regional diplomacy.
Ferlito said while some easing in prices may occur if tensions subside, “as long as uncertainty in the region persists, it is reasonable to expect that prices will remain relatively high in the short term, even without physical shortages”.
