Kuala lumpur: Heightened geopolitical uncertainty surrounding developments in the Strait of Hormuz could influence global capital flows, with commodity-exporting economies such as Malaysia potentially better positioned amid rising energy prices. Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said rising geopolitical tension often prompts investors and traders to adopt a risk-off stance.
According to BERNAMA News Agency, Mohd Afzanizam noted that during times of heightened uncertainty, traders and investors gravitate towards safe-haven assets or prefer to invest in highly liquid money market instruments. He emphasized that Malaysia's status as a net exporter in the oil and gas sector places it in a favorable position, as the country has maintained a surplus in this area.
The development follows reports that Iran has permitted oil shipments through the Strait of Hormuz to be traded in Chinese yuan. This has garnered attention from financial markets due to the strategic significance of the waterway in global energy supply. Notably, Iran allowed an Aframax-class vessel carrying Das crude from Abu Dhabi to pass through the Strait after the shipment was settled in Chinese yuan, en route to Pakistan.
Malaysia's commodity position presents a buffer against these uncertainties. For instance, Malaysia recorded a trade surplus of RM18.2 billion in the oil and gas sector in 2025, up from RM13.1 billion in 2024, largely driven by refined petroleum and liquefied natural gas (LNG) exports.
Nonetheless, Mohd Afzanizam cautioned that the situation in the Strait of Hormuz remains volatile, with uncertainties regarding potential de-escalation. He highlighted that Malaysia's economy, as a net oil exporter, might be better positioned, which could explain the ringgit's recent strength against the US dollar.
However, the economist warned that rising oil prices could have fiscal implications for Malaysia, particularly through increased fuel subsidy burdens. He noted that the government currently faces significant subsidy costs, which may necessitate a review of the subsidy structure.
Meanwhile, IPPFA Sdn Bhd director Mohd Sedek Jantan interpreted the disruptions in the Strait of Hormuz as a trade-corridor shock rather than a systemic financial event. He explained that such disruptions primarily impact energy availability, transport costs, and commodity pricing before affecting financial markets.
Mohd Sedek stressed that the real risk lies in the potential for prolonged disruptions to reintroduce energy inflation into the global macroeconomic cycle, primarily impacting Asian economies that heavily rely on oil and LNG from the Strait.
From a market perspective, Berjaya Research Sdn Bhd head Kenneth Leong observed that global markets are already reflecting heightened geopolitical risks. The closure of the Strait has led to a surge in oil prices and freight rates, with global markets experiencing a retreat from recent highs.
Leong added that the current uncertainty has strengthened the US dollar, which could lead to increased oil prices and potential benefits for oil and gas upstream producers. However, he cautioned that higher crude oil prices might also challenge Malaysia's fiscal deficit targets due to increased subsidy costs, potentially prompting a flight of foreign funds from emerging markets.