01/04/2026

BIZ & FINANCE WEDNESDAY | APR 1, 2026

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Energy security takes centre stage amid shift in priorities

M’sia in position of strength as it faces oil price shocks, says BNM KUALA LUMPUR: Malaysia is in a position of strength as it faces oil price shocks following the West Asia conflict, supported by robust domestic demand, mo derate inflation, a sound financial sector and a resilient external position. Bank Negara Malaysia (BNM) said the country’s standing as a net energy exporter also provided some buffer against external headwinds. “Nevertheless, BNM will remain vigilant to the rapidly evolving nature of this conflict and stand ready to ensure that monetary policy remains supportive of the economy while safeguarding price stability,“ it said in the Economic and Monetary Review 2025 released yesterday. Since Feb 28 this year, geopolitical tensions in West Asia have escalated sharply following the onset of military conflict, disrupting regional oil and gas production, as well as associated supply chain and logistics. BNM said the overall impact of the conflict on Malaysia would depend on its duration, the severity of the disruption, and how far it affects global energy production and logistics. The central bank said the conflict affects the domestic economy mainly through three key channels, including higher energy prices, which raise import costs and subsequently exert upward pressure on domestic production costs as well as consumer prices. These, in turn, could dampen household spending and business activity, it added. Bernama higher costs, interest rates and policy challenges. Still, the sector remains a key growth area, with global offshore wind investments expected to reach around US$100 billion annually by 2030, driven largely by Asia and Europe. Beyond generation, Asia is increasingly dominating global energy supply chains, particularly in manu facturing. The region leads in key segments such as solar panels, battery cells, wind turbine components and offshore vessels, positioning it as a critical enabler of the global energy transition. China alone accounts for a significant share of production across these segments, while countries like Indonesia and Malaysia are expanding their capabilities. Rystad also highlighted the growing importance of emerging technologies in Asia’s energy mix, including floating solar, small modular nuclear reactors and CCS projects. In parallel, regional cooperation on power grids is expected to strengthen energy resilience. “Asia is entering a pivotal period in its energy journey,” Rystad said. “It’s really an all-of-the-above strategy that will define the next decades.” - by DEEPALAKSHMI MANICKAM

Petronas, he added, is adopting new approaches such as clustered exploration and more agile upstream models to unlock resources more efficiently. Diversification, meanwhile, will be critical in building resilience, encompassing not only a broader mix of energy sources but also supply routes, technologies and revenue streams. The company is expanding its portfolio across both hydrocarbons and lower-carbon solutions, in cluding liquefied natural gas projects, floating LNG facilities and biofuels. Taufik highlighted the delivery of Petronas’ first cargo from LNG Canada, which offers significantly lower greenhouse gas intensity com pared with conventional facilities, as part of efforts to support customers transitioning away from coal. He also pointed to the develop ment of a biorefinery in Malaysia aimed at producing sustainable aviation fuel and other cleaner energy products. Integration across sectors and borders will form the third pillar, enabling more efficient energy systems and better management of supply and demand. Petronas has recently partnered with regional utilities and counterparts in Vietnam and Singapore to support cross-border renewable energy trade, laying the groundwork for a broader Asean power grid. “This next chapter of energy will not be defined by resources alone, but by the technologies that unlock them faster, cleaner and at scale,” Taufik said. Rystad estimates that around 1,200 new offshore fields will need to be developed globally to meet future demand, with Southeast Asia emer ging as a key frontier despite complex geology. At the same time, Asia’s role as a major energy importer continues to shape market dynamics. While the region is expected to drive the strongest growth in gas demand, there are also risks of oversupply in the 2030s as new projects come online globally. Rystad said this could eventually create a more favourable environ ment for buyers, even though current market conditions remain tight due to supply disruptions. Alongside conventional energy, offshore clean energy is gaining traction, although at a slower pace than previously expected. Offshore wind capacity forecasts have been revised down compared with earlier projections, reflecting

South Korea and Indonesia. “Suddenly the things we take for granted, like switching on the lights or having fuel at the pump, are increasingly at risk,” he said. Against this backdrop, global energy demand continues to climb, driven by population growth, industrialisation and the rapid expansion of digital infrastructure. He noted that global energy consumption has tripled since the 1970s, and is set to rise further with the growth of artificial intelligence and data centres. Electricity demand from data centres alone is expected to more than double by 2030. At the same time, disparities between developed and emerging economies are shaping energy priorities, with advanced nations focusing on competitiveness and critical minerals, while developing economies continue to prioritise access and affordability. Today, around 700 million people still lack access to reliable electricity, while two billion lack access to clean cooking fuels. “No nation should be deprived of the right to pursue economic growth via access to reliable and affordable energy,” Taufik said. In response to these challenges, he outlined three key imperatives for the industry moving forward: accelerating supply, diversifying energy pathways, and integrating systems. On supply, he said the industry must move faster to deliver energy amid rising costs and market volatility, with speed becoming a baseline requirement rather than a competitive advantage.

o Petronas president and CEO says world entering unprecedented phase of uncertainty, on cusp of possible outright disaster

Its CEO, Jarand Rystad, said the region can increasingly depend on its own resources and capabilities, particularly as disruptions in the Middle East expose vulnerabilities in global energy supply. “The main message is that you can rely more on Asia than you can on the Middle East,” he said at the Offshore Technology Conference Asia 2026, where the firm unveiled its latest white paper on offshore energy. The shift comes as Asia Pacific offshore energy investment is pro jected to average about US$150 billion (RM710 billion) annually through 2035, supporting both oil and gas development and the expansion of low-carbon technologies such as offshore wind, carbon capture and storage (CCS) and floating solar. Rystad noted that global energy demand is expected to rise about 15% over the next 15 years, requiring total investments to exceed US$5 trillion annually by 2045 to stay aligned with climate goals. KUALA LUMPUR: Energy security is set to dominate global industry priorities as geopolitical tensions and supply disruptions force a rethink of the pace and structure of the energy transition, said Petroliam Nasional Bhd (Petronas) president and group CEO Tan Sri Tengku Muhammad Taufik. Opening the Offshore Technology Conference Asia 2026 (OTC Asia 2026), he warned that the world is entering an unprecedented phase of uncertainty, with escalating conflict in the Gulf region threatening to disrupt critical energy flows at a scale far beyond previous crises. “We are on the cusp of a possible outright energy disaster,” he said, noting that nearly 20 million barrels per day of oil, equivalent to about one-fifth of global consumption, alongside a similar share of global liquefied natural gas (LNG) trade, transits through the Strait of Hormuz. The disruption of such volumes, he added, would have far-reaching consequences not only for energy markets but also for downstream industries and global supply chains, from semiconductors to agriculture. “This conflict may well be thousands of miles away, but we’re Ű BY DEEPALAKSHMI MANICKAM sunbiz@thesundaily.com

all in harm’s way,” he said. The warning comes as govern ments and businesses grapple with rising costs, volatile prices and growing risks of supply shortages, raising concerns of a prolonged period of stagflation if the crisis escalates further. Taufik said the current situation underscores a critical reality often overlooked in recent years, that energy security remains a funda mental precondition for economic stability and growth. “Without a readily available, affordable and resilient system, if hydrocarbons stop flowing in totality, the world would come to a grinding halt,” he said. While reaffirming that Petronas is committed to sustainability and climate goals, he stressed that the transition to lower-carbon energy must not come at the expense of supply reliability. The tension between decar bonisation and energy security has become more pronounced across Asia, where several countries are reverting to coal to manage shortfalls in gas supply and cushion rising costs. Taufik pointed to recent develop ments in the region, including emergency measures in the Philip pines, fuel fund pressures in Thailand, and increased coal usage in major economies such as India,

Rystad: Asia set to lean more towards offshore, regional sources KUALA LUMPUR: Asia is set to deepen its reliance on offshore energy and regional supply chains as geo political tensions and rising demand reshape global energy dynamics, according to Rystad Energy. However, a prolonged escalation could trigger severe supply disruptions. “In a worst-case scenario, prices could go extremely high, even up to US$200 per barrel, because you would need demand destruction on a scale similar to Covid-19,” he said.

Rystad speaking at the Offshore Technology Conference Asia 2026. He says Asia can increasingly depend on its own resources and capabilities than on the Middle East.

upstream investment. The urgency has been amplified by ongoing tensions in the Middle East, which have injected volatility into global energy markets. Rystad said its base case assumes a ceasefire in early April, with oil prices remaining elevated in the second quarter before easing towards US$80 per barrel later in the year.

Within this, Asia will remain the primary driver of demand growth, accounting for the fastest expansion in power consumption globally. Despite the transition push, oil and gas will continue to play a critical role. Rystad said oil demand is expected to peak in the early 2030s, while gas could peak later in the decade, underscoring the need for continued