16/04/2026

THURSDAY | APR 16, 2026

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Ű BY FAIZ RUZMAN newsdesk@thesundaily.com

Malaysia faces rising shipping costs amid Hormuz tensions

PETALING JAYA: Malaysians may start paying more even before shortages emerge as uncertainty over the Strait of Hormuz prompts businesses to adjust prices and households to brace for higher living costs. Economists warn that the earliest impact of the crisis may come not from physical disruptions but from sentiment-driven behaviour that influences pricing, spending and investment decisions across the economy. Malaysian Institute of Economic Research and Universiti Malaya Social Wellbeing Research Centre senior research fellow Dr Zulkiply Omar said market sentiment would be the fastest transmission channel, ahead of actual cost pressures. He said while higher oil prices, freight costs, fuel subsidies and imported inflation would eventually filter through the economy, these effects typically take longer to materialise along the supply chain. “Tensions in the Strait of Hormuz will raise oil prices and global shipping costs. This will increase fuel subsidy costs, logistics costs and imported inflation. It will also have a multiplier effect on production costs across the supply chain. “However, the impact through those channels is not immediate. It is slower. The fastest channel is market sentiment, which takes effect almost instantly. “Sentiment will influence the behaviour of producers and consumers, and markets will respond based on expectations, even if the actual impact is not yet certain,” he told theSun. Zulkiply cautioned that the situation should not be viewed as a temporary shock, warning that a more volatile external environment could persist and reshape economic PETALING JAYA: Malaysia is beginning to feel the strain from escalating tensions in the Strait of Hormuz, as shipping costs surge, insurance cover is pulled and vessel access tightens – raising the risk of higher prices at home. Shipowners warn that war-risk insurance for vessels operating in the area has been cancelled, while bunker fuel costs have surged by as much as 140%, sharply increasing operating expenses. Malaysia Shipowners Association (Masa) chairman Mohamed Safwan Othman said the fallout had moved beyond the maritime sector, given Malaysia’s heavy reliance on shipping for strategic cargo such as food imports, coal for energy and palm oil exports. He warned the disruption could soon feed into higher freight charges and broader inflation. “We are indeed very concerned about the statements made by the United States president regarding the Strait of Hormuz. Under international maritime conventions, any strait or waterway in the world is a free passageway. “It cannot simply be blocked by any country and the countries helping to administer that strait are supposed to facilitate passage,” he

o Tighter vessel access, insurance pullbacks and fuel spikes risk lifting import prices and inflation: Shipowners association

Ibrahim, on possible security support for Malaysian cargo vessels. However, he said such measures were not required at this stage, as Putrajaya continues to rely on diplomatic engagement. “What we told the government is that our priority is, first, the safety of the seafarers on board. Second is our assets, meaning the ships, and third is the cargo we are carrying, because that cargo is critical to the continuity and needs of the Malaysian people.” The latest uncertainty follows US President Donald Trump’s announcement of a naval blockade on ships entering and leaving Iranian ports after ceasefire talks with Tehran collapsed. The blockade came into force on Monday, with the US military reporting that six merchant vessels had turned back within the first 24 hours. See also page 18

regional exporter, we need a large number of vessels to carry strategic cargo such as food. We also export palm oil, and for energy we import coal.” He added that the impact was already spilling into land and air transport, pushing up costs across the board. “We expect inflation to rise as food and other goods become more expensive in the near term.” A United Nations Development Programme assessment released on Tuesday reinforced those concerns, warning that the latest Middle East escalation could cost the Asia-Pacific region between US$97 billion (RM383.3 billion) and US$299 billion (RM1.18 trillion) with up to 8.8 million people at risk of falling into poverty. Safwan said discussions had been held with the government, including Prime Minister Datuk Seri Anwar

behaviour over time. He said businesses would need to improve efficiency, adopt appropriate technologies and strengthen innovation, while households may have to adjust spending habits, conserve energy and rely more on alternatives such as public transport and home cooking to manage rising costs. Putra Business School director of MBA programmes Prof Dr Ahmed Razman Abdul Latiff said the more immediate pressure point for Malaysia would be fiscal, particularly the cost of sustaining fuel subsidies if global oil prices remain elevated. He said while the government could still absorb the pressure in the short term, prolonged disruption would significantly strain fiscal management and narrow policy space. “If tensions in the Strait of Hormuz persist, the fastest pressure on Malaysia’s economy will come through fiscal stress driven by rising fuel subsidies. With subsidy costs already exceeding RM3 billion a month, Malaysia may still be able to absorb the pressure in the short term if prices remain high but stable. “However, if the disruption continues and oil prices remain elevated over a longer period, pressure on the fiscal deficit and consolidation commitments will intensify.” Ahmed Razman said if the crisis drags on, the impact would widen across supply chains, with transport and logistics sectors likely to be affected first, followed by energy intensive manufacturing and food industries dependent on imports. He added that lower and middle income households would bear the greatest burden as the cost of essential goods continues to rise. – By Faiz Ruzman told theSun. Safwan said the situation had already escalated beyond rising costs, with some vessels now unable to secure insurance for Hormuz-linked routes. “The effects are already being felt. Insurance is not merely increasing, it has actually been cancelled. “What they call the war-risk premium – many insurance companies are no longer covering ships that want to berth in or pass through the Strait of Hormuz.” He said fuel costs had also climbed sharply since tensions escalated. “Since the tension began, fuel

costs have also risen. Just the cost of fuel for ships has gone up by 140%.” The Foreign Affairs Ministry earlier confirmed that one of seven Malaysia-linked vessels had safely transited the waterway, while six others remain in the area awaiting clearance. Safwan warned that the bigger risk was not only rising costs, but whether enough vessels would remain available to carry essential cargo if the disruption drags on. He said countries and shipowners would prioritise their own strategic needs in a prolonged crisis. “One direct effect is a shortage of ships. As an importing country and a

‘Market sentiment likely to drive early price increases’

Petronas reaffirms its commitment in ensuring a stable and reliable fuel supply and urges the public to purchase fuel responsibly and avoid panic buying or hoarding. – MASRY CHE ANI/THESUN

Supply secure through June: Petronas

Ű BY HARITH KAMAL newsdesk@thesundaily.com

Canadian energy sector. Meanwhile, Economy Minister Akmal Nasrullah Mohd Nasir said the government is implementing measures to cushion the impact of global fuel supply disruptions, including exploring alternative feedstock such as increasing the biodiesel blend from B10 to B15. He warned that any fuel shortage could also affect the supply of other materials, particularly those derived from petroleum. “June and July will be a very critical period in ensuring fuel supplies remain stable and sufficient. It is equally important to ensure industries have adequate access to other raw materials, including those derived from fuel,” he added.

companies operating in the country. The company reaffirmed its commitment to ensuring a stable and reliable fuel supply, while urging the public to purchase fuel responsibly and avoid panic buying or hoarding to maintain continued accessibility. Previously, Prime Minister Datuk Seri Anwar Ibrahim said Malaysia has sufficient fuel supply to meet domestic demand until June, crediting Petronas’ strong ties with oil producing nations for helping secure supplies despite geopolitical tensions. He also said the country has adequate liquefied natural gas (LNG), supported by strong domestic production, long-standing import relationships with Australia and Petronas’ partnerships with the

PETALING JAYA: Fuel supply at Petroliam Nasional Berhad (Petronas) stations nationwide is secured through to the end of June, extending the company’s earlier projection of end-May coverage. In a statement yesterday, the national oil company said it is actively managing its supply chain to maintain sufficient stock levels amid a global energy squeeze triggered by escalating conflict in West Asia. Petronas, through its listed subsidiary Petronas Dagangan Berhad, supplies about 50% of Malaysia’s fuel requirements, with the remainder provided by other oil