Sharp, essential news and analysis from Malaysia.
Oil prices jumped more than 1% on Tuesday as prospects for a US-Iran agreement to end hostilities and restore shipping through the Strait of Hormuz deteriorated following Donald Trump's insistence on Tehran paying reparations for war-related losses.
Royal Dutch Shell's first-half earnings jumped 70 per cent to US$16.75 billion, driven by volatile oil markets and strong trading performance despite disruptions in the Middle East and geopolitical tensions affecting global energy supplies.
Crude futures dropped sharply to two-week lows on Tuesday after a temporary halt in US-Iran hostilities raised hopes for diplomatic engagement, though fundamental supply disruptions and regional conflicts continue.
The US dollar has climbed to its highest level in nearly four decades against the Japanese yen, reaching above 163 yen despite warnings from Tokyo that it stands ready to intervene in currency markets.
Prime Minister Anwar Ibrahim disclosed that Malaysia is allocating up to RM50 billion annually in fuel subsidies to sustain RON95 petrol prices at RM1.99 despite climbing international oil markets, underscoring the significant fiscal burden on the government.
Bursa Malaysia opened weakly despite surging oil prices, with the FBM KLCI rising just 3.01 points to 1,714.38. Energy stocks rallied on crude concerns, but investor caution persisted ahead of next week's Federal Reserve decision.
Malaysia's government projects fuel subsidies for RON95 petrol and diesel could total RM3.5 billion monthly if crude oil stays at US$90 per barrel, though officials say the country's fiscal position remains secure.
Malaysia's Deputy Finance Minister has confirmed that current fiscal projections for Budget 2027 require no immediate revision, even as elevated oil prices inflate subsidy costs by an estimated RM40 billion.
Malaysia's Economy Minister Akmal Nasrullah has cautioned the public and businesses to prepare for significant economic fallout from Iran's renewed closure of the Strait of Hormuz, warning of cascading supply chain disruptions across multiple sectors.
Deputy Prime Minister Datuk Seri Fadillah Yusof has assured Malaysians that the country's energy sector faces no supply disruptions, despite escalating tensions in the Strait of Hormuz. However, volatile global oil prices continue to pose economic challenges.
CIMB Treasury projects Bank Negara Malaysia will keep its overnight policy rate unchanged at 2.75% this Thursday, citing softer global oil prices and reduced inflation pressures following the US-Iran ceasefire.