The impact of war and oil shocks on the Malaysian economy is largely determined by the degree of oil price increases (permanent or temporary) and duration of supply disruptions. The Malaysian economy has had experienced a few episodes of major oil price shocks, largely triggered by intensified geopolitical conflicts in the Middle East. Prior to 2022, Malaysia’s position as a net oil exporter had allowed it to benefit from oil price surges. On balance, higher oil prices have had manageable impact on the Malaysian economy. The best-case scenario for inflation is estimated between 2.5% and 3.5% (assuming the oil price is at US$80-US$90 per barrel); worse case is 4%-6% (assuming the oil price is at US$90-US$120 per barrel).

Source: The Star March 18, 2026 23:41 UTC