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