RISING global oil prices amid fears of renewed military confrontation between the United States and Iran could increase Malaysia's energy cost pressures, even as the ringgit continues to strengthen against the US dollar.
Brent crude climbed above US$115 a barrel on Friday, approaching four-year highs, while the US benchmark West Texas Intermediate (WTI) rose towards US$103 as markets assessed the risk of further US military strikes against Iran.
The rally followed reports that a senior military commander had briefed US President Donald Trump on potential military options against Tehran, with Trump warning that airstrikes could resume after next week's midterm elections.
However, Iranian officials confirmed that US Vice-President JD Vance had sent a letter seeking to restart peace negotiations, offering a possible diplomatic avenue amid escalating tensions.
Both oil benchmarks have gained more than 10 per cent in October as the US-Iran conflict continues, while clashes involving Saudi Arabia and Iran-backed Houthi forces have added to concerns over regional energy supplies.
Shipping risks through the Strait of Hormuz remain elevated, with tankers continuing to face attacks, although regional crude exports have recovered to near prewar levels as producers discreetly move cargoes through the strategic waterway.
For Malaysia, sustained increases in global crude prices could raise fuel subsidy exposure and energy-related costs, while adding pressure to businesses and consumers if higher prices are passed through.
However, the ringgit's appreciation against the US dollar could help cushion some of the impact, particularly as international crude oil transactions are predominantly denominated in the US currency.
The US dollar index stood at 101.829 on Thursday, down 0.36 per cent from the previous session, reflecting a 0.37 per cent decline over the past four weeks.
Despite the latest weakness, the dollar has gained 2.31 per cent over the past 12 months.
Recent US economic data showed continued resilience, with third-quarter gross domestic product expanding at an annualised rate of 3.4 per cent, above market expectations of 3.1 per cent.
Headline personal consumption expenditures inflation accelerated to 3.6 per cent in September, while core inflation reached 3.1 per cent, both remaining above the Federal Reserve's two per cent target.
Consumer spending rose 0.5 per cent during the month, while initial jobless claims fell to 194,000, indicating continued strength in the labour market.
The Federal Reserve's decision to maintain interest rates at between 3.75 and four per cent leaves policymakers assessing incoming economic data before determining their next move.
Against the ringgit, the US dollar traded at RM4.0581 on Friday, down 0.07 per cent from the previous session.
The ringgit has strengthened 0.65 per cent against the US dollar over the past four weeks and gained 3.1 per cent over the past 12 months.
The exchange rate movement could provide some protection against imported energy costs, although the extent of the benefit will depend on how long crude prices remain elevated and how global oil market disruptions develop. - October 30, 2026
