GLOBAL oil prices eased on Thursday as renewed diplomatic efforts to contain the Middle East conflict offered some relief to markets, although persistent regional security risks continue to threaten energy supplies and keep costs elevated for oil-importing economies such as Malaysia.
Brent crude fell to around US$114 a barrel, while West Texas Intermediate (WTI) slipped to about US$102, trimming gains from the previous session after prices reached multi-year highs amid escalating hostilities and concerns over shipping through the Strait of Hormuz.
The pullback followed reports of diplomatic contacts involving US Vice-President JD Vance and Iranian national security official Mohsen Rezaei, while US President Donald Trump confirmed that negotiations were taking place through mediators but cautioned that their outcome remained uncertain.
Iranian Foreign Minister Abbas Araghchi also reiterated Tehran’s openness to diplomatic solutions.
Despite the easing, Brent and WTI have gained more than 17% and 14% respectively this month, supported by clashes involving Saudi Arabia and Iran-backed Houthi forces and continuing threats to shipping through the Strait of Hormuz.
However, energy flows from the region have recovered to levels close to those recorded before the war, providing some relief to concerns over supply disruptions.
For Malaysia, the direction of oil prices remains important for domestic fuel costs, transport expenses and inflation, although the impact on retail pump prices also depends on government subsidy policies, exchange-rate movements and the domestic fuel-pricing mechanism.
The US Dollar Index, which measures the greenback against a basket of major currencies, rose 0.10% to 102.233 on Thursday, after slipping in the previous session following the US Federal Reserve’s decision to leave interest rates unchanged.
The Fed voted 10-2 to maintain its federal funds rate at 3.75% to 4%, with two policymakers favouring a 25-basis-point increase. Its latest statement offered no clear indication of whether rates would rise again in December, with future decisions dependent on incoming economic data and progress towards its 2% inflation target.
The dollar’s movements remain relevant to Malaysia because crude oil and many other internationally traded commodities are priced in US dollars. A stronger greenback can increase import costs in ringgit terms, although the actual impact depends on currency movements and commodity prices.
The ringgit traded at around 4.0750 against the US dollar on Thursday, strengthening 0.04% from the previous session. It has gained about 0.14% over the past month and 2.92% over the past 12 months, according to the supplied market data.
The currency’s relative resilience could help cushion the cost of dollar-denominated imports, but it may not fully offset the impact of sustained high oil prices.
For policymakers, the combination of elevated crude prices, geopolitical uncertainty and currency fluctuations remains a key consideration in managing fuel subsidies, inflation and the broader cost of living. - October 29, 2026
