MALAYSIA faces renewed pressure on fuel costs and inflation as Brent crude climbs back above US$100 a barrel and the ringgit weakens against the US dollar amid escalating tensions in the Middle East.
Brent crude traded above US$102 a barrel on Friday after gaining for two consecutive sessions, while US West Texas Intermediate (WTI) traded around US$93.
Brent settled at US$102.31 a barrel on Thursday, up US$4.28 or 4.37%, while WTI gained US$2.45 or 2.71% to US$92.87.
The latest oil rally came as the United States weighed sending another aircraft carrier and up to 10,000 additional sailors and Marines to the Middle East, raising concerns that the conflict with Iran could escalate and further disrupt regional energy supplies.
US President Donald Trump has reportedly told aides that he expects to resume bombing Iran after the November midterm elections.
The heightened tensions come despite Middle Eastern crude flows having largely recovered to pre-war levels. However, concerns remain over the sustainability of those flows, particularly after at least three tankers were attacked while transiting the Strait of Hormuz this week.
For Malaysia, a prolonged period of crude prices above US$100 could complicate the government's management of fuel subsidies and increase costs across transport and businesses, particularly if higher energy prices feed into broader inflation.
The weaker ringgit adds another layer of pressure as oil is traded predominantly in US dollars.
The US Dollar Index rose to around 102 on Friday, its highest level since March 2025, while the US dollar was trading at about RM4.0880 against the ringgit.
A weaker ringgit increases the domestic cost of dollar-denominated oil and other commodity imports, potentially amplifying the impact of higher global energy prices.
However, higher crude prices could also provide some offset for Malaysia as a net exporter of crude oil and petroleum products, with the overall effect depending on production, exports, domestic consumption and government subsidy policies.
The combination of higher oil prices and a firmer US dollar therefore presents competing effects for the Malaysian economy, with the immediate risks centred on energy costs and inflation if the Middle East supply disruption persists.
Markets will continue to watch developments around Iran and the Strait of Hormuz, as any sustained disruption to one of the world's key oil shipping routes could put further upward pressure on crude prices. - October 2, 2026
