- 4 hours ago
Harga minyak global melonjak melebihi AS$110–114 setong susulan ketegangan di Timur Tengah dan gangguan di Selat Hormuz, meningkatkan risiko tekanan kos kepada Malaysia serta mencabar kemampuan kerajaan mengurus subsidi.
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00:00Since last week, the global energy market has once again become volatile with a sharp spike in oil prices.
00:06Brent crude has now surged past the US$110 to US$114 per barrel level, driven by escalating conflict in
00:14the Middle East.
00:15Even more concerning is the situation in the Strait of Hormuz, a vital route that carries nearly 20% of
00:21global oil trade, which is now at a critical stage.
00:25In the Malaysian context, although we have our own oil and gas sector, global energy price increases continue to put
00:31pressure on transportation, logistics, food costs and the daily expenses of consumers.
00:36Rising global oil prices typically trigger a rapid chain reaction domestically, testing the government's ability to manage subsidies and maintain
00:44fiscal stability amid an increasingly unpredictable geopolitical environment.
00:48So to discuss further, we have Izzas Azhar, the Director of Ace Micro Credentials Growth and Expansion in Asia's School
00:53of Business.
00:54Good morning, Izzas. Thank you for joining us.
00:56We see that oil prices have now surged above US$110 per barrel, the highest level since the pandemic.
01:02So in your view, is this merely a short-term reaction to the conflict or does it signal pressure that
01:07could persist for a longer period?
01:11Good morning, everyone. Izzas here. Thanks for having me on the show.
01:15First, let's take a look at where we are now. Let's look at the big picture.
01:18The world consumption of oil is about 102 million barrels per day, right?
01:25That's a big number. And 20% of this comes from the region that's currently affected in the Middle East.
01:30Immediately, the markets have moved. We will see a risk premium to it.
01:35And the markets have priced in the moment conflict escalated.
01:38But let's unravel a bit of the mechanics, the drivers behind the risk.
01:43Actually, behind the risk, what it is, is the physical supply problem.
01:46Even though there is like a ceasefire today, it doesn't mean the lights turn back on immediately.
01:52You have storage to deal with. You have refining infrastructure that's been hit on both sides.
01:56So it doesn't really come back immediately, right?
01:59The next thing to take a look at is the oil market actually moves on futures.
02:04Countries, companies, airline companies, shipping companies hedge against oil on futures.
02:08Now those futures are kind of unstable because Qatar has declared a force majeure, right?
02:16Force majeure, act of war. The futures don't apply anymore, right?
02:19And they're looking at maybe a minimum one month to restore some of the facilities that are involved.
02:25To rebuild the supply chain at a minimum is going to take weeks.
02:29And I think nobody really knows the full extent of the damage right now.
02:33So I think long and short of the story, the spike above 110, it might ease.
02:39It could go higher. It depends on the geopolitical incessions that these players are in the region right now.
02:45But even if it does subside, the physical supply gap underneath is not going to resolve on the same timeline,
02:52right?
02:5220% is a big gap. How do we plug this gap today?
02:55Venezuela has complexities. Russia has sanctioned.
02:58Basically, all oil refineries have been designed and are working on almost maximum output every day.
03:04It's not like you can say, I want to buy a million barrels of oil today and next week it
03:08arrives.
03:09There's a long supply chain in that process.
03:11So I think those are going to be one of those big issues that we have.
03:17Iza asked, we know that the Strait of Hormuz is one of the world's most critical routes for oil supply.
03:23So if this road is disrupted, to what extent actually could it drive oil prices even higher and further unsettled
03:29global market sentiment?
03:31And this is for the viewers out there. This is really important.
03:35So what makes this a bit different, right?
03:37I want to come back to the energy supply chain again.
03:40There are really four parts that are involved.
03:41You have extraction, you have refining, you have storage, and then you have transportation.
03:46Now, in previous conflicts, you would have maybe one or at most two of these disrupted.
03:53Right now, we have all four of them that are disrupted simultaneously.
03:56And on top of that, it's in a region that provides a significant margin, right?
04:01So back in the past, you would not really see red lines like energy, right, crossed very, very in a
04:07large scale because of the global ripple effects.
04:09But now, we're seeing it.
04:11To put it into context, previously, we've had two Gulf Wars.
04:15We had Operation Desert Storm in 1990, and you had the Iraq War in 2003.
04:19This current conflict looks like it might become in a third if no real concessions are made.
04:25Now, the understanding of this immediate impact is when the oil price spikes, the petrol pump spikes, is bad.
04:32That's true, but that's only one channel.
04:34There are actually a couple more things that we have to look at in Malaysia.
04:36The first thing is the direct fuel costs in Malaysia, right?
04:41Malaysia is not entirely a petroleum-driven country.
04:47We actually run a diesel because what happens, diesel runs industries.
04:51It runs development.
04:52It runs construction.
04:53It runs the trucks.
04:54It runs the lorries and a bunch of different things.
04:56So immediately, we're going to see something happening within the diesel segment.
04:59And the second thing is because of the nature of this global supply chain impact, we may even see a
05:06slowdown of trade in trade partners.
05:08For example, China.
05:09China is Malaysia's largest trading partner.
05:12If China's industrial cost of production spikes, it means that stuff that comes here is also going to spike.
05:20Our stuff kind of weakens as well.
05:21So there are a lot of indirect hits that are going to be around this ecosystem as well.
05:26And, yeah, I think global sentiment is going to be unsettled until we solve this supply chain and physical supply
05:34issue.
05:35We want to look at the context of Malaysia.
05:38Malaysia is in a rather unique position, and we have our own oil and gas sector.
05:43Yet, at the same time, we remain exposed to global energy prices.
05:46So when oil prices rise like this, does Malaysia truly benefit, or are we actually forced to absorb more of
05:52the cost pressures?
05:54So I think there are really two drivers to this, right?
05:57Let's talk about Malaysia as an oil exporter, which we are.
06:01We export our own tapis oil, right?
06:03It's a premium oil, very low sulfur, very little impurities, easy to refine.
06:08Again, a key part of Malaysia's national economy really relies on this arbitrage in where we sell premium oil for
06:15high, and we bring in cheaper sour oil that we use locally, right?
06:20Import cheaper oil for local use.
06:21So at the net level, at the macro level, I think Malaysia will be a net beneficiary of sorts.
06:28However, that benefit is not evenly distributed, right?
06:31We will see eventually the costs becoming more visible than the gains.
06:34The crude that we produce and the petrol that we pump run on two different supply chains.
06:39So right now, what we produce, the upstream wins, but the downstream where we import the oil is going to
06:44get hit.
06:45The first shock that I think we will see will be in the subsidy mechanism, right, if this conflict prolongs.
06:51PMX has already said we have maybe about two months buffer before we have to make some fiscal adjustments.
06:55And the next question that is always on everybody's mind, can we use our own oil for consumption?
07:02The long answer is it's difficult because our refiners in Malaysia, we've been calibrated to process sour oil from the
07:09Gulf nations primarily.
07:11A good example of this would be to see the Pengerang Saudi Aramco JV down in Johor, right?
07:15So for our refiners to process our current tapis oil, to change that entire thing, it's going to make a
07:21big change in infrastructure.
07:22It is not going to be easy to do.
07:25And I think if the conflict continues, the consumers are basically going to have to absorb a lot of these
07:31cost pressures, unfortunately.
07:32It is actually really concerning here, Isas, because if oil prices remain elevated,
07:37the impact will not be limited to petrol stations alone, but could also spill over into logistics costs, food prices
07:43and transportation.
07:44So how soon my ordinary Malaysians begin to feel these pressures in their daily spending?
07:52Well, like I said, around the corner, we've got diesel.
07:55Malaysia doesn't run on petrol.
07:57Diesel feeds into food transport, into construction, into manufacturing.
08:00I will tell you something on the ground.
08:02My family business, we're in the maritime industry, right?
08:05We run ferry services from Kedah to Thailand.
08:08We've told our captains, and this was the last week, right?
08:10We told our captains to ease up the gas.
08:15So if we as an SME, we're already making business decisions based around this, right?
08:20I think we can start to expect other people to follow suit.
08:23We are probably going to see slow delivery.
08:25We're going to see more cautious supply chains and movement that are going on.
08:30Now, this all depends on how long the conflict lasts, right?
08:34And what sort of geopolitical concessions are made.
08:36I think the current concessions that have been put forward, it's a long shot for what's being discussed at this
08:42moment, right?
08:43In fact, Malaysia, back in the day, I think we mooted a couple of projects that were called the Multiproduct
08:49Pipeline, MPP, and what's called the Trans-Sabah Gas Pipeline.
08:52We call them off due to economic constraints.
08:54But these projects, if you ask me, they would have served both a pipeline and a storage reserve, not only
09:00in the tanks, but also in the pipes.
09:02So that would have probably brought us down to three to four months of reserves.
09:05On an SME, consumer perspective, once these two or three months run out, then we may see some fiscal adjustments
09:13being made.
09:15Okay, we want to see on the geopolitical standpoint, which major powers actually stand to benefit the most from the
09:22current volatility in the global oil market?
09:24Are the strategic advantages leaning more towards Western actors, such as the United States and Israel?
09:29Or do countries like Russia and China appear to gain comparatively more from these developments?
09:36I think because the conflict is so widespread and the repercussions on the supply chain are so wide, I don't
09:42think there are any winners in this.
09:43It just looks bad across the line.
09:47One point of interest would probably be China, right?
09:50And their move towards renewable energy, green energy.
09:53But even then, China still relies a lot on Gulf oil to feed their refineries as well.
10:00So I don't see anyone being affected.
10:02I don't see anyone winning.
10:03The biggest win to this conflict that's going on is actually to stop it, right?
10:11But based on what I've seen, do you remember the Ukraine-Russia conflict?
10:15Everybody thought it would stop within two months, you know, within three months.
10:18You know, they've had things set up, stop within a week.
10:20It's been four years.
10:20So based on historical trends, I think we should prepare ourselves to just take a look at, you know, how
10:28long this may last.
10:29And the second thing is for the Straits of Hormuz, right?
10:34It's not that ships are being blocked.
10:35There is no blockade.
10:36Insurers are just increasing their premium and commercial ships are not moving through, right?
10:41So you can't exactly threaten an insurance company to reduce their price premiums.
10:46That's not how it works.
10:48I think there are some things that cannot be solved in this manner.
10:51So the best solution is just for everybody to keep a level head, introduce restraint, and hopefully that peace will
10:58come once again.
10:59Do you see that this crisis is that something that we can actually take advantage from with many countries now
11:05accelerating investments in renewable energy and also diversifying away from fossil fuel dependencies?
11:11Could this crisis serve as a turning point that pushes Malaysia to rethink its long-term energy strategy?
11:17That's an interesting question, actually.
11:19I think we've tried to diversify from fossil fuels for a while now.
11:24You can see it in some of our renewable energy plans, in the RMK.
11:30And I think this is, once again, comes back to the level of preparedness that we've made over the past
11:37couple of years.
11:38Can renewable energy fill that buffer?
11:42I think to a certain extent, yes, but primarily still infrastructure still runs on diesel.
11:47Infrastructure still runs on petrol, right?
11:49And until we have that, we've developed that internal advantage to do so, something like China, right, it's going to
11:57be a difficult transition.
11:58In the interim, it will, this is a short-term kind of stopgut measure for now, right?
12:05We have to stop this before we can go further, I suppose.
12:09And let's talk on the impact or the longer-term impact.
12:12We see that higher energy prices tend to widen inequality as low-income households feel the impact more acutely.
12:19In your opinion, it's asked what targeted interventions could the government consider to protect vulnerable groups without overextending fiscal resources?
12:27And also on the businesses, especially SMEs, that are still recovering from previous global disruptions such as the pandemic,
12:34how should Malaysian firms, particularly in logistic, manufacturing and retail, prepare for a period of potentially sustained high operating costs?
12:44I think the first thing is we have to find a way to dig into oil reserves, right?
12:48We have to plug this gap right now.
12:50Like I said, at an SME level, even family offices like mine are starting to be very, very cautious about
12:58how we put this forward.
12:59We already have a subsidy system in place, right?
13:02You use your IC at the car and you get the petrol station and you get a subsidy.
13:06That's depending on how long the conflict goes ahead, right?
13:09We may have to come back and kind of restructure this entire thing because our budget was built on an
13:15oil price of $60, you know, $60, $70.
13:18Now it may spike to $100.
13:20Some people are saying it might even reach $140, right?
13:24So we've got maybe a couple of months at best to sort this out.
13:28Well, I think what happens here is where ASEAN has to come in.
13:30I think ASEAN can play a much bigger role in negotiating an energy supply for the rest of the region.
13:37In fact, within the entire ASEAN region, I think the two nations that are best prepared right now to weather
13:43the scenario are probably Malaysia and Singapore.
13:45And it's very, very interesting if you look back in history of how the oil trade started in Malaysia.
13:49It comes back to this Malaysia-Singapore collaboration.
13:53Very, very interesting to see that.
13:54But I think ASEAN would be able to make a bigger impact, would be able to have a bigger, bigger
13:59voice in this as well.
14:00We should all come together, right?
14:02Of course, the first thing is stop the conflict.
14:05But in between that, we should arrange better trade agreements and understanding of that supply chain to make sure that
14:11ASEAN is the beneficiary as a whole.
14:13I think this is where we must come in right now.
14:15All right, Izzas.
14:16Maybe lastly, through all the uncertainties and the volatilities looking ahead,
14:22what indicators should Malaysians watch, whether geopolitical, economic or market-based,
14:27to understand how the situation may evolve and what it may mean for domestic prices?
14:32Yeah.
14:33So the costs of oil are going to be in real time right now.
14:39Because of the futures market have been affected, right?
14:42Effectively, everybody is going to buy spot oil on spot prices of the market straight away, right?
14:47If oil averages, let's say, maybe $100 for three months, for entire quarter,
14:53and the subsidy starts to crowd up our development expenditure,
14:57because the subsidy comes from somewhere.
14:59It comes at the expense of development expenditure.
15:01It comes at the expense of infrastructure, right?
15:03And that's when you start to see the language shift from we are monitoring to we are reviewing, right?
15:10Now, to be honest, I think we do have real buffers in place in Malaysia.
15:15It is not a full-blown crisis yet.
15:19However, these buffers do have a timeline,
15:21and that timeline is going to be measured in weeks and not months anymore.
15:25So what to watch?
15:26If crude is still above $100 by mid-April,
15:30and there is no credible ceasefire or end to the conflict,
15:34then let's look at what the government would be saying about revision of framework.
15:41You know, should we revisit some of the fiscal policies before the end of quarter two?
15:46It may be a real possibility at this point,
15:49but I'm hoping it doesn't turn that way.
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