Is Stagflation Unavoidable for the Global Economy?

 

The price of key oil benchmarks had already posted their highest weekly gains in six years by the time markets opened on 9 March 2026 – when they soared to more than US$115 a barrel. This has surpassed $100 for the first time since Russia’s 2022 invasion of Ukraine. The West Texas Intermediate (WTI) benchmark price for US crude is now nearly double its January level of about $60 a barrel. 

Oil production cuts across the Middle East in recent days have exacerbated fears of a supply shortage. Gas and fertiliser supplies have also been hit, driving up costs and increasing the risk of a significant global energy price spike, adding to inflation and slowing economic activity.

 

Source: https://en.wikipedia.org

The US war on Iran is widely expected to boost inflation across the world, with a sustained rise in oil prices rippling through the wider economy. US inflation will surge to 3.7% if oil prices hold at $100 a barrel. Americans filling up their cars can already feel the impact: US fuel prices rose 25 cents over the week, and picked up another 25 cents over the weekend, averaging $3.44 a gallon. Higher fuel costs drain workers’ wallets and add to business costs in other ways, pushing up the price of goods from food to furniture. 

Inflation is also set to pick up across the UK and eurozone if higher oil prices persist, according to Oxford Economics. Europe, which imports the vast majority of its oil and gas, saw natural gas prices rise nearly 67% in the war’s first week, according to analysts at ANZ Bank. China’s producer prices will meanwhile rise 0.4 percentage points if oil prices stay high, ANZ Bank has projected. In Australia, inflation is set to approach 5% – close to 1 percentage point higher than pre-war predictions – economists say. Petrol prices could rise by a dollar a litre, Westpac economists warned, with costs already A$0.20 a litre higher than in February. 

Oil price spikes are “stagflationary”: they slow down, or stagnate, economic activity, raising the risk of recession, while adding to inflation. World economic growth would weather a 10% lift in energy prices, according to the International Monetary Fund, but slow from about 3.2% to 3%. The UK and the euro area would each grow by just 1% or less, if the conflict persists, economists predict. 

Asian economies have enjoyed strong growth in industrial production, powered by the global tech boom, but an energy shock could disrupt that momentum, risking stagflation, Oxford Economics has warned. In the US, oil prices of $125 a barrel could cut gross domestic product by 0.8% even as inflation surpasses 4%, according to RSM, a middle-market assurance, tax and consulting firm. The oil shock resembles those seen in the 1970s. 

The world is likely to face slower growth and higher prices, even if Trump ends the war, because oil prices will not return to their lows of January. Traders will charge a premium to cover the risk of a renewed “on-again, off-again” conflict. Countries across Asia, which is particularly reliant on oil from the Middle East, are already scrambling to mitigate the impact of the extraordinary rise in prices. 

A quick de-escalation would help the world avoid an inflation spiral, as oil prices would stabilise, according to the National Australia Bank’s chief economist, Sally Auld. While she said it seemed unlikely the conflict would endure for another month, if it did, there would be “material risk of global recession” and oil prices could hold near US$120 a barrel. A month-long disruption could even see prices surpass the all-time record high of US$145 a barrel, Goldman Sachs has estimated. Three months of disruption would see prices rise to US$185 per barrel, with severe consequences for the global economy, Westpac economists predict. 

Nothing bodes well for this U.S. President. Only when markets crash and inflation rises in the U.S. will he stop this man-made crisis. There is no endgame or outcome or Plan B! If he is keen to have a regime change – then change North Korea, China, Russia and a whole host of African and Latin American leaders. Will he do that? No!

 

Reference:

Why has the Iran war sparked fears of stagflation for the global economy? Luca Ittimani,
9 March 2026

Why Does Malaysia Import Oil & Gas?

 

Malaysia exported RM170 billion worth of O&G products across three categories: crude petroleum and condensate, refined petroleum products, and liquefied natural gas (LNG). Meanwhile, the country imported RM152 billion worth of O&G products, making it a net exporter by RM18 billion.

 

Image via Dialog Group (Facebook)

Malaysia produces high-quality crude oil, also known as light sweet crude, specifically Tapis Blend, which has lower sulphur content and commands a higher price in global markets. Instead of refining all of it locally, Malaysia often exports this premium crude to countries willing to pay more for it, while importing cheaper heavy crude oil, also known as sour crude oil for its higher sulphur content, which is better suited for domestic refineries.

Both sweet and sour crude oil produce similar end products, except that sweet crude yields high-value fuels such as gasoline and jet fuel. Over the years, declining domestic reserves and rising demand have meant Malaysia also needs to import certain petroleum products and crude oil to meet both domestic consumption and export commitments.

Ultimately, it comes down to business, trading to maximise profits while ensuring refineries receive the types of crude oil they are designed to process. There is no pride in keeping "premium" products for domestic use if it means earning less and affecting the country's GDP. Global oil prices still affect Malaysian fuel prices despite being a net exporter by RM18 billion (this is for petroleum products including gas). However, since 2022, we are net crude oil importer (but net exporter with LNG and petroleum products). 

According to the Malaysian Investment Development Authority (MIDA), the country has six oil refineries located in: 

·              Port Dickson, Negeri Sembilan

·              Kertih and Kemaman, Terengganu

·              Tangga Batu and Sungai Udang, Melaka

·              Pengerang, Johor

The country also has two naphtha crackers, two ethane gas crackers, and six LNG facilities, including two floating ones.

Meanwhile, Malaysia has about 20 active drilling rigs, making up roughly half the regional total, placing it among Southeast Asia's leaders in exploration and production (E&P) activity.

Malaysia has a refining capacity of approximately 1.03 million barrels per day, while producing (drilling from the earth) slightly over half a million barrels per day.
Most Malaysian refineries are configured to process heavier sour crude oil, which is typically imported from countries such as Saudi Arabia, the UAE, and Oman. The only local refinery dedicated to processing sweet crude oil is PETRONAS Penapisan in Terengganu, the company's first refinery in Malaysia, which processes about 49,000 barrels of sweet crude oil. 

So, we have sufficient capacity to process sour crude, the Strait of Hormuz will matter to us. Why? The war with Iran will drive prices up – above USD100 per barrel and have inflationary forces unleashed.

Reference:

Explained: Why does Malaysia import oil & gas despite producing its own? Says.com, 12 March 2026

 

Selamat Hari Raya!

 

From Iran to I-ran!

 

On Feb 28, 2026, Tehran was rocked by an attack by the US-Israeli joint forces, targeting key military facilities and the Iranian leadership. The Iranians did not respond immediately. We have now entered into the third week. 

Markets have reacted. The most profound moves seen in the price of oil, which has jumped by more than 50%. The United States has used multiple reasons to justify its action, but these are seen as more of excuses than valid reasons. 

Source: https://ms.wikipedia.org

 

Among the many excuses used by the United States was that Iran was just two weeks away from developing a nuclear weapon. This is in the world of fantasy. In June 2025 the United States said  Iran’s nuclear infrastructure was obliterated. 

Another reason for the United States to strike Iran was that the president had a “good feeling” that Iran was going to strike Israel, hence, a pre-emptive strike. US President Donald Trump himself said that the reason for the strike in Iran was to facilitate regime change. Guess what? Iran has just appointed another Supreme Leader by the same surname. 

Like Venezuela, the key objective is again economics, and the economics here is nothing but oil. Iran has the world’s third-largest proven oil reserves with just over 200 billion barrels of oil and is presently the world’s fourth-largest producer of oil at about 3.5 million to four million barrels per day. More importantly, Iran has some 12% of global oil reserves. 

Iran’s geographical position is also of significance as it controls the Strait of Hormuz, where some 20% of global oil is transported. It is the sole sea passage from the Gulf region to the rest of the world. 

Since Trump came to power just over 14 months ago, the United States has been involved in multiple conflicts. And he is the Chairman of the Board of Peace. The United States has been involved in at least eight attacks since Trump took office in January 2025. So much for peace!

The war in Iran costs US$1bil per day, and for a nation with US$38 trillion in debt, any war is a costly affair. The elevated oil prices will be damaging to the United States in the form of higher consumer prices, lower stock prices and potentially higher US Federal Reserve rates to contain inflation. 

The United States and Israel have three choices when it comes to ending this war:

 

(i)             The United States recognises the newly elected Supreme Leader and works with Iran to reach an amicable solution with respect to Iran’s nuclear programme (if any).

 

(ii)            The United States withdraws its military assets from combat positions.

 

(iii)          The United States sends its ground troops into combat while the Iranians continue to attack US assets in the region, drawing other Middle East countries into an endless war. This is the worst option for all and is damaging for capital markets and asset prices. 

Trump’s best option is to retreat gracefully, or in other words, from declaring war on Iran to running away from it. In short, from “Iran to I-ran”. 

Reference:

Does the world need another war?, Pankaj C. Kumar, The Star, 14 Mar 2026

Is Malaysia Resilient With the Current Oil Shock?

 

Brent ended last week at USD92.69/bbl, but the more relevant issue is whether disruption in the Strait of Hormuz persists long enough to keep oil in a higher range for months rather than weeks. Under that path, Kenanga Research’s duration simulation lifts the implied 2026 Brent average to about USD94.8/bbl. In their view, that is the key macro threshold. The longer oil stays elevated, the greater the risk that the shock broadens from energy into freight, food, distribution and inflation expectations.

 

For Malaysia, Kenanga thinks the commodity cushion is real, but not large enough to neutralise a persistent external oil shock. Bank Negara Malaysia (BNM)’s decision to keep the overnight policy rate at 2.75% suggests policymakers are still prepared to look through the first-round move, but that comfort narrows if higher fuel and logistics costs begin feeding more visibly into broader prices. 

 

Malaysia will remain relatively resilient, supported at the margin by domestic demand and terms-of-trade gains, but still exposed to tighter financial conditions and wider second-round inflation pressure if disruption persists. 

 

Domestic demand has held up well, the external sector still has commodity support, and BNM has not signalled any need to react to energy volatility in isolation.  Growth has remained resilient in recent years, with forecast still pointing to 4.6% in 2026.

 

 

References:

Malaysia resilient but not immune to prolonged oil shock, says Kenanga, CS Ming, Focus Malaysia, 9 March 2026

Living Under One Roof!

 

Multi-generational living used to focus on ageing parents. Today, developers are designing homes for a different reality. They are thinking about working adult children who need their own space, privacy and independence without leaving home. This change is subtle, but it reflects a broader shift in both culture and economics. 

For many Malaysian families, the adult child who moved back during the pandemic or never left at all has become a long-term fixture in the household. What started as a temporary arrangement has quietly reshaped how many families live.

                                                             Source: https://id.wikipedia.org

Malaysia’s population is gradually ageing. In 2025, the country’s median age rose to 31.3 years, up from 30.9 in 2024, reflecting an overall shift towards an older demographic. According to the Statistics Department, the working-class population aged 15 to 64 years made up 70.4% of the total, marking a slight increase from 70.2% in 2024. The share of Malaysians aged 65 and above rose to 8% in 2025 compared to 7.6%, a year earlier. At the same time, the proportion of children aged zero to 14 declined to 21.6%, compared with 22.2% in 2024. These shifts are clearer when viewed through dependency ratios which measure how many children and elderly people are supported by every 100 working-age individuals. 

The total dependency ratio eased slightly to 42.1 in 2025 from 42.5 in 2024. The decline was mainly due to fewer children, as the youth dependency ratio fell to 30.7 from 31.6. However, the old-age dependency ratio rose to 11.4 from 10.9, highlighting the growing number of elderly Malaysians. Overall, the data points to a gradual demographic shift, with fewer young people and more seniors shaping the country’s future. But demographics alone do not explain what is happening in Malaysia’s housing market. 

Developers are responding to real-life pressures on families, from the cost of urban living to cultural expectations and financial realities. Homes are being redesigned to accommodate adult children who stay at home longer than previous generations, balancing independence with shared family life. Across urban townships and high-rise projects, subtle changes are emerging. More developers are introducing dual entrances, so one part of a home can function almost as a self-contained unit. Others include lockable studio spaces or extra master bedrooms that allow adult children to have their own privacy while remaining under the same roof. Splitting utilities and separating meters make it easier for families to manage expenses independently. These features do not exactly get marketed as homes for adult children. They are described as flexible layouts, rental-friendly spaces or multi-generational designs. But the conventional is shifting because developers have been paying attention to how Malaysians are living now. 

Overall, the economic pressures are real. Urban property prices continue to rise faster than wages in many cities, making independent living increasingly difficult. Renting or buying a small apartment can be expensive and commuting adds both time and cost. For many young Malaysians, staying with family becomes the most viable option and developers are adapting their designs accordingly. 

Financially, households are pooling resources to manage costs more efficiently. Culturally, staying at home longer is increasingly seen as practical rather than a failure to leave the nest.

Whether this trend will persist depends on multiple factors. If wages grow and housing affordability improves, younger adults may once again seek independent living earlier. If economic pressures continue or if caregiving needs expand with an ageing population, multi-generational living may become the default rather than the exception. 

Reference:

All under one roof, Samantha Wong, The Star, 1 March 2026

Is it from Glory to Gutter?

 

There were seven players involved in the national football scandal. They were not “heritage” nor naturalised players. Neither of their grandparents were born in Malaysia. They have been found guilty. 

Fifa sanctioned the Football Association of Malaysia (FAM) and the seven players on Sept 26 last year. From the moment the scandal broke, FAM officials chose clouding over accountability. They attempted to cloak the fact that fraudulent documents - including birth certificates - were used to clear these seven players to don the Harimau Malaya jersey in the Asian Cup qualifiers. Through the National Registration Department (NRD) and Home Minister, whose ministry oversees it, the government’s role is already a matter of public record.

 

Source: https://en.wikipedia.org 

When the scandal broke, a declaration dated Sept 19, 2025 made by NRD director-general Badrul Hisham Alias, and submitted to Fifa as a defence statement, stated that the players provided the required documents with the names and identification details of their grandparents. 

Three bodies - the Fifa Disciplinary Committee, Fifa Appeals Committee, and the Court of Arbitration for Sports (CAS) have called NRD’s bluff or mistake - there is no such lineage. So, what has NRD got to say? 

Now, on top of legal fees, FAM must swallow its pride and send 350,000 Swiss Francs to Fifa - the fine for its open defiance. Malaysians need to know the full extent of this rot.

Malaysians deserve answers, not silence. We deserve the names, the documents, and the accountability that have been so artfully dodged. This saga has never really been about football. It is about a culture of impunity. If our leaders cannot answer for how public funds were used to forge public documents, then they are not just silent partners in this scandal - but complicit in the cover-up. 

The fiasco affects football, our relationships with FIFA, AFC and the nations we play football with. The “Magnificent Seven” was the theme song for the movie by the same name. In the movie, the seven were “heroes”, here they are all made to look like villains. And the moral of the story is our citizenship could be processed in weeks if you can play football but decades if you can’t. 

To clean this up, we need a new FAM structure with all Malaysians in it and a respectable President, not a politician or any from the royalty. We need programmes from schools graduating into FAM’s “wings”. We need exposure of players in overseas football leagues. We need a blueprint on the “Road to World Cup” (could be a 10-year plan). And many more, but most of all integrity in our words and actions. 

Reference:

Comment: From glory to gutter: Football’s bitter truth deserves to be told, R Nadeswaran, Malaysiakini, 9 March 2026