MalayMail-Aug 13
With no end in sight, the war between the United States and Iran has left countries scrambling to shore up their fuel supplies and secure alternative sources of energy. The Strait of Hormuz, a crucial route carrying about one-fifth of global oil and liquefied natural gas flows, has remained severely disrupted since the conflict erupted in late February.
Almost 40 per cent of Malaysia’s crude oil imports pass through the waterway, making any prolonged disruption a significant concern for the country’s energy security. Malaysia, a net importer of crude oil, produces about 350,000 barrels of oil a day but consumes about 700,000 barrels, according to the Finance Ministry. Malaysia also subsidizes fuel for domestic consumption, keeping pump prices below those in some major oil-producing countries such as Saudi Arabia and Qatar. Fuel subsidy spending surged from nearly RM800 million a month in January and February to around RM5 billion a month in March and April after global oil prices spiked following the outbreak of the war. If high global oil prices persist, the country could face an overall fuel subsidy bill of about RM40 billion by the end of 2026. Despite the pressure, Malaysia is turning the energy crunch into an opportunity to strengthen its diplomatic relationships, leveraging its long-held policy of neutrality and non-alignment. First, safe passage for Malaysian vessels through Hormuz. Malaysia maintains diplomatic relations with Iran despite their different political and sectarian orientations, while continuing to engage with Tehran through diplomatic channels. Iran subsequently cleared seven Malaysian-owned vessels to transit the Strait of Hormuz for free due to Malaysia being a ‘friendly nation’, Transport Minister Anthony Loke told Bernama on March 31, citing Iran’s Ambassador to Malaysia Valiollah Mohammadi.
