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SARAWAK is staring at significant decrease in financial revenue from its oil export due to a sizeable drop in global oil prices due to current uncertainties caused by the ongoing tariff war between United States and major world powers, said Premier Tan Sri Abang Johari Abang Openg.
Speaking at a Hari Raya event in the State Financial Secretary office in Kuching today, he said the drop in oil revenue could be significant by this year end.
"The price of crude oil has dropped to US$65 per barrel and is expected to remain low for some time to come. Sarawak oil exports are based on projections at US$85 to US$90 per barrel.
"The drop by US$20 per barrel is significant. And, by end of this year, we may see a signficant drop in oil export revenue. Sarawak may then have to realign our export strategies if this situation extends into 2026 and beyond," he said.
Abang Johari had said Sarawak does not expect to face an adverse impact in the immediate term following the move by the U.S. Government to hike up tariffs for goods from many countries including Malaysia.
Today, Johari, however, said the drop in global oil prices will definitely hit Sarawak as the state is a top oil and gas producing hub.
"Sarawak must therefore look ahead and plan our strategies accordingly to strengthen our export revenues if the oil revenue remains low. We must look for ways to raise revenue to meet current commitments," he said.
Sarawak needs to solidify its position as one of Malaysia’s key energy hubs, with major offshore oil and gas operations concentrated off the coasts of Miri and Bintulu.
The state boasts significant crude oil production facilities in its territorial waters, alongside substantial natural gas extraction activities. These resources not only underpin Malaysia’s energy export revenues but also play a crucial role in meeting Sarawak’s domestic fuel and energy demands.
Crude oil extracted from offshore platforms is exported globally while also channelled into refining processes to support local consumption. Likewise, Sarawak’s abundant natural gas output contributes to both international liquefied natural gas (LNG) exports and domestic energy generation.
With its strategic coastal infrastructure and longstanding expertise in hydrocarbon industries, Sarawak remains a critical player in Malaysia’s broader energy economy. – April 17, 2025