SARAWAK can no longer afford to rely heavily on oil and gas, logging, and plantation sectors as its primary sources of income, said Yang Dipertua Negeri Tun Dr Wan Junaidi Tuanku Jaafar, warning of the impending economic headwinds fuelled by global tariff wars and political instability.
“Sarawak will definitely feel the impacts from current developments on the global scenes if we depend on oil and gas and natural commodities for revenue,” Wan Junaidi said during the opening of the Sarawak State Legislative Assembly sitting today.
“We must reduce our dependence on natural resources. We must diversify our economic bases to generate new sources of income,” he stressed.
The Governor welcomed Sarawak’s push into emerging sectors, particularly green energy and the aerospace industry, noting that “these new exciting potentials will help to shape a Sarawak with a sustainable future.”
He added that Sarawak’s move to foster more international partnerships in digital technology would “augur well for future industries”.
His remarks come as Sarawak braces for a potential drop in oil revenue, with global crude oil prices falling sharply in recent months due to ongoing economic tensions, including the US-China tariff conflict.
Premier Tan Sri Abang Johari Tun Openg recently confirmed that Sarawak could face a “significant” decline in oil-related income by the end of the year.
“The price of crude oil has dropped to US\$65 per barrel and is expected to remain low for some time to come,” Johari said. “Sarawak oil exports are based on projections that the price per barrel was between US\$85 to 90. The drop by US\$20 per barrel is significant.”
“If this situation extends into 2026 and beyond, Sarawak may have to realign our export strategies,” he warned.
While Johari previously stated that the US Government’s recent tariff hikes on global imports are not expected to immediately impact Sarawak, he acknowledged that oil and gas revenues would take a hit.
“Sarawak must therefore look ahead and plan our strategies accordingly to strengthen our export revenues if the oil revenue remains low. We must boost up our revenue to meet our current commitments,” he added.
Sarawak, home to major crude oil and natural gas production facilities off the coast of Miri and Bintulu, has long depended on fossil fuel exports as a pillar of its economy. These resources are also refined for domestic use. - May 19, 2025
