04/03/2026

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WEDNESDAY | MAR 4, 2026

‘Energy security inseparable from economic resilience’

RAM Ratings keeps Malaysia’s 2026 growth forecast at 4-5%, cites domestic strength PETALING JAYA: Malaysia’s gross domestic product (GDP) is projected to grow by 4% to 5% in 2026, reflecting continued strength in the domestic economy. Maintaining its GDP growth projection for Malaysia, RAM Ratings Services Bhd said Q4 2025 GDP growth accelerated to 6.3% from 5.4% in Q3, underpinned by stronger services at 6.3% from 5.5% in Q3 2025 and manufacturing growth, which stood at 6.1% in Q4 from 4.1% in Q3. On the demand side, the rating agency said. private consumption and investment activities rose by 5.3% and 9.2%, respectively, in Q4 2025. Further, RAM Ratings said Malaysia’s favourable labour market conditions supported growth. The semiconductor upcycle also strengthened Malaysian exports. Moving on, RAM Ratings said the current turn of events may weigh on this year’s outlook, with major ones including the reversion of US reci procal tariffs. It said the decision by the US Supreme Court to strike down the reciprocal tariff measures enacted under the International The Emer gency Economic Powers Act provided only temporary relief to major US trading partners. The US government almost imme diately followed up with a new 10% global blanket tariff under an alter native law. RAM Ratings said that while both tariff scenarios are less punitive than the 19% tariff under the Agreement on Reciprocal Trade, uncertainty remains elevated. Touching on the escalation of conflict in the Middle East, RAM Ratings noted that the military strikes conducted by the US and Israel against Iran, followed by Iran’s retaliatory attacks on US military bases across several Gulf states, injected significant geopolitical uncertainty into the region. One of the most significant risks is to the global oil market, particularly through elevated disruption risks to seaborne oil trade, given Iran’s stated intention to close the Strait of Hormuz. This narrow maritime chokepoint bordering Iran handles close to 30% of global seaborne oil trade, equivalent to around 20% of global oil and petroleum consumption, based on data from 2020 to Q1 2025. Taken together, these factors are likely to keep global oil prices elevated in the near term, as long as the conflict persists, RAM Ratings said. For Malaysia, it added, the most immediate direct impact would likely stem from higher oil prices and potential disruption to oil supply, given that about 30% of the country’s mineral fuel imports originate from the Middle East. “However, broader trade disruption is seen to be relatively limited, as the Middle East is not a major trading partner for Malaysia.”

o Price spikes and supply disruption arising from Middle East situation could increase Petronas dividends but costlier fuel imports would negate gains: Economy minister

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

(RM314-RM392.55). For Malaysian businesses and the power sector, he said, this market scenario creates uncertainty on fuel costs, electricity pricing and overall energy security. “That is why it is important to diversify our energy sources, streng then domestic generation capacity, and accelerate renewable and transition technologies. In short, while Malaysia is well-positioned relative to some countries, these developments show that energy security is inseparable from eco nomic resilience. It’s about pre paring a system that can maintain reliable, affordable, and stable energy supplies even amid global volatility and high oil price scenarios.” Malaysia is an exporter of crude oil and LNG, but it still imports refined petroleum products, leaving it exposed to global fuel price volatility. Akmal Nasrullah said the government is maintaining its 2026 gross domestic product growth target of 4% to 4.5%, despite rising geopolitical risks. “I have remained consistent in my position. When performance was strong, there were calls to revise our 2026 targets upwards. However, we must now take into account the evolving geopolitical landscape.” He highlighted that last year the government had maintained its growth projection of 4% to 4.8%,

KUALA Escalating tensions in the Middle East – particularly US-Israel military strikes on Iran – could increase dividend payouts from Petroliam Nasional Bhd (Petronas) and lift government coffers, but higher imports for refined petroleum products may offset much of the gain. Economy Minister Akmal Nasrullah Mohd Nasir said oil prices have spiked as markets factor in potential supply disruptions. “And this matters to us in Malaysia because LNG (liquefied natural gas), which Malaysia imports from Australia and other suppliers, is closely linked to global oil prices. So, any sudden increases can affect industrial energy costs, electricity generation, and household fuel expenditures. “A key risk we must all watch is the Strait of Hormuz. Even a temporary closure or restriction of this vital energy transit chokepoint could sharply tighten supply, pushing up global crude and LNG prices, and creating higher risk premiums for energy imports,” he said at the Oil & Gas, Services and Equipment 100 CEOs Forum 2026 yesterday. Akmal Nasrullah said the impact can be substantial on the domestic front, as Brent crude prices surge toward US$80-US$100 per barrel LUMPUR:

Akmal Nasrullah (centre) speaks during the OGSE 100 Chief Executive Officers Forum 2026. Also present are MPRC president/CEO Mohd Yazid Jaafar (left) and Velesto Energy president Megat Zariman Abdul Rahim. – BERNAMAPIC

In the base case, she added, markets tend to treat geopolitical tensions as short-term volatility, particularly if there are no sustained disruptions to global energy supply routes. “However, if tensions escalate into prolonged supply constraints or broader regional instability, the risks could shift from financial market volatility to real economic effects, including slower global growth and tighter financial conditions. “For Malaysia, the key risk lies not in the bilateral conflict itself but in the possibility of a sustained global energy shock combined with weaker external demand,” Rabiatul said. – Bernama ventures, consortia, or structured alliances, we need stronger Malaysian entities able to bid bigger, deliver faster and build long-term positions in international markets,” he added. Akmal Nasrullah said the Ministry of Economy’s role is to provide the tailwind – a policy environment that supports scaling, investment, talent development and market access. “Through MPRC (Malaysia Petroleum Resources Corporation), we are aligning priorities and strengthening delivery through the National OGSE Industry Blueprint 2021-2030, including initiatives under the 13th Malaysia Plan. “Critically, the blueprint is designed as an ecosystem. The blue print includes collaboration with key players – Petronas, Matrade, and OGSE industry associations – so that support is coordinated, practical, and aligned to industry needs,” Akmal Nasrullah said.

particularly energy-intensive in dustries such as chemicals and heavy manufacturing, as well as agriculture, could face cost pressures due to higher fuel and input costs. “Higher energy costs could compress margins, particularly for small and medium enterprises with limited pricing power,” she said. Sectors that may display relative resilience include oil and gas pro ducers, energy-related infrastructure firms, and upstream service providers, she added. “Companies linked to upstream energy production may benefit from improved margins, while fiscal revenue tied to hydrocarbons could strengthen in the short term. “However, the overall impact depends on how much of the higher energy cost is absorbed eventually surpassing expectations. “Any necessary recalibration based purely on the data will ultimately be undertaken by Bank Negara Malaysia. At this juncture, however, we remain focused on our forward-looking growth targets for 2026.” The minister said the current global volatility underscores the need for Malaysian OGSE firms to strengthen resilience and scale internationally. “If we want Malaysian OGSE to expand its international footprint, we must move decisively from being traditional service providers to becoming technology-driven, low carbon solution providers, export ready, innovation-led, and capable of delivering complex projects to global standards. “To achieve scale, strategic partnerships are no longer optional; they are the engines of scale. “Whether through mergers, joint

M’sia’s exposure to conflict moderate, manageable: Economist KUALA LUMPUR: Malaysia has a moderate exposure to the ongoing US-Iran conflict, and the situation is importer of certain refined petroleum products. It remains integrated into global supply chains. through subsidies as opposed to being passed on to consumers,” Rabiatul said.

Therefore, higher global energy prices will still filter through the domestic economy,” she told Bernama. The economics lecturer said Malaysia’s exposure is less about direct bilateral trade links with the US or Iran and more about

manageable from a macroeconomic stand point, supported in part by its position as a net oil and gas exporter, said an economist. Universiti Teknologi Mara Faculty of Business and Management senior lecturer Dr Rabiatul Munirah Alpandi ( pic ) said Malaysia has a partial buffer when global oil prices rise, as

second-round global spillover effects trans mitted through com modity prices, capital flows and investor sentiment. On sectoral impact, she said if oil prices remain elevated, transport and logistics, aviation, manufacturing,

energy exports contribute significantly to fiscal revenue, particularly through Petroliam Nasional Bhd (Petronas) and related upstream activities. “However, Malaysia is also a net