Kuala lumpur: Malaysia's initiative to explore the establishment of a national petroleum reserve (NPR) comes at a critical time as ongoing geopolitical tensions along crucial global shipping routes highlight the necessity for bolstering the country's long-term energy resilience, analysts indicate.
According to BERNAMA News Agency, the Strait of Hormuz, a vital conduit through which around 20 million barrels per day of petroleum liquids-approximately one-fifth of the global supply-pass, is increasingly perceived as a persistent source of disruption. SPI Asset Management managing partner Stephen Innes emphasized that the Strait of Hormuz should no longer be regarded as a one-time shock, as recurring threats, shipping delays, higher insurance costs, and tighter tanker availability continue to maintain a risk premium in global energy markets.
Innes noted, "I think this is becoming more structural. The pressure may rise and fall, but it is unlikely to disappear until a broader network of pipelines, alternative export routes, and other bypasses is built." He further explained that such developments could take years, rendering the Strait of Hormuz a continuous source of volatility.
Prime Minister Datuk Seri Anwar Ibrahim recently announced that the government would examine the necessity and strategies for creating an NPR stock. This measure aims to ensure energy security and enhance the country's resilience against geopolitical uncertainties and global supply crises.
In a related development, Iran's Houthi allies in Yemen have reportedly finalized preparations to attack ships transiting the southern entrance to the Red Sea, later claiming responsibility for attacks on two Saudi oil tankers following a new wave of US strikes on Iranian military targets. Innes asserted that these reported attacks underscore the urgency for Southeast Asian governments to bolster energy resilience, as risks are no longer confined to the Strait of Hormuz.
He cautioned that simultaneous disruptions across the Gulf and Red Sea shipping routes could subject the region to elevated oil prices, freight costs, and supply delays. "The immediate priorities should be to review strategic fuel inventories, diversify crude, refined-product, and liquefied natural gas suppliers, and strengthen ASEAN coordination on stock levels, shipping disruptions, and emergency supply arrangements," Innes advised.
At the time of writing, Brent crude increased by 2.97 percent to $96.86 per barrel, while West Texas Intermediate rose by 1.93 percent to $88.76 per barrel. Innes also encouraged governments to reevaluate broad fuel subsidies, suggesting that targeted assistance for lower-income households and critical industries would be more sustainable if oil prices remain high.
Innes highlighted that energy security is about ensuring access to energy supplies, whereas energy resilience involves maintaining energy systems' functionality when normal supplies or transport routes are disrupted. This requires backup inventories, diversified suppliers, alternative shipping routes, stronger electricity grids, and the flexibility to switch between fuels before a crisis arises.
Turning to Malaysia, Innes described a national petroleum reserve as "emergency insurance" that should complement rather than replace commercial inventories. He noted that while it cannot resolve every supply problem, it can provide policymakers with valuable time during a crisis. The reserve should be part of a broader strategy that includes diversified suppliers, improved storage infrastructure, and clear rules governing when reserves are released and replenished.
Innes further advocated for Malaysia to diversify fuel suppliers and transport routes, support commercially viable domestic gas production, strengthen regional power connectivity, and accelerate renewable energy backed by battery storage and reliable backup generation.
BMI oil and gas analyst Tariro Chiweza echoed the timeliness of the Malaysian government's study on establishing an NPR, stating that commercial petroleum inventories are designed for operational continuity but may not suffice to withstand prolonged external supply disruptions. She pointed out that although Malaysia produces approximately 570,000 barrels of oil per day, it remains a net importer of refined fuels and sourced 69.2 percent of its crude oil imports from Strait of Hormuz-related suppliers in 2025.
Chiweza emphasized that the case for an NPR is now more compelling as part of a broader resilience strategy. She recommended that Malaysia continue to expand domestic gas production, renewable energy, battery storage, regional interconnectors, electrification, and nuclear power. Existing initiatives such as Solar@PETRA, the Corporate Renewable Energy Supply Scheme (CRESS) for corporates, B15 biodiesel, and electric public transport support broader resilience objectives.
She added that BMI forecasts Malaysia's dry gas production to reach 82.3 billion cubic meters in 2026, reinforcing the country's domestic supply base alongside its energy transition efforts.