MALAYSIA could get some relief from elevated energy costs as crude oil prices fell below US$90 a barrel on Wednesday, driven by a recovery in Middle East exports and plans by the United States to release up to 40 million barrels from its emergency reserves.
The recovery in regional oil flows has eased immediate concerns over supply shortages, with analysts estimating the 10-day average of Middle East crude exports at 17.5 million barrels per day, or 98% of pre-war levels.
Saudi Arabia has also resumed crude exports through its East-West pipeline at about half its capacity, while oil continues to move through the Strait of Hormuz through covert shipping.
Brent crude, meanwhile, traded around US$96 a barrel after also falling sharply in the previous session.
The United States plans to release up to 40 million barrels from its Strategic Petroleum Reserve (SPR) as it grapples with soaring fuel prices, adding to downward pressure on global crude prices.
Industry data also showed US crude inventories increased by about one million barrels last week.
Despite the latest retreat, both US crude and Brent remain on course for a third consecutive monthly gain amid the prolonged US-Iran conflict and widespread supply disruptions.
For Malaysia, sustained lower crude prices could ease pressure on energy and fuel costs, although the benefit will also depend on movements in the ringgit and government pricing and subsidy policies.
The ringgit weakened to 4.0825 against the US dollar on Wednesday, up 0.03% from the previous session, as the greenback strengthened on expectations of further Federal Reserve tightening.
The US Dollar Index rose 0.04% to 101.421, near a three-month high. It has gained about 2% over the past four weeks and 3.8% over the past year.
The ringgit has weakened 1.41% against the US dollar over the past month but remains 2.97% stronger over the past year.
The stronger US dollar could partly offset the benefit of cheaper crude for Malaysia by raising the ringgit cost of dollar-denominated imports.
Markets are also watching developments in US-Iran talks aimed at ending the conflict and fully reopening the Strait of Hormuz, while upcoming US inflation and employment data could provide further clues on the Federal Reserve’s interest-rate path.
Swaps traders are pricing in nearly one percentage point of Fed rate increases over the coming year, while the dollar has gained about 1.8% in September.
The direction of global oil prices and the ringgit will therefore remain key factors in determining the extent of any relief to Malaysia’s energy costs in the months ahead. - September 30, 2026
