The US-Israel-Iran war has caused oil and natural prices to surge. As the war drags on, fears of a prolonged supply shock that could ripple across the global economy have intensified. For Malaysia, the situation presents a mixed picture. While Malaysia is a net oil importer, this is more than offset by her position as a big net natural gas exporter, making the country a net energy exporter. The country benefits from higher natural gas prices, which can boost government revenues and improve the trade balance. 

Nevertheless, higher global energy prices inevitably transmit through the economy, feeding into broader inflation. The second minister of finance has said that the Malaysian government is able to maintain the RON95 petrol price at RM1.99 per litre for at least two months. However, if the war persists and energy prices remain elevated, Malaysia will eventually face fiscal and economic pressures. Malaysians should therefore manage their financial conditions carefully and brace for possible price increases in the months ahead.

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