Malaysia Must Diversify Energy Sources to Reduce Geopolitical Exposure

Economy Minister Akmal Nasrullah Mohd Nasir emphasized the importance of diversifying Malaysia's energy sources and strengthening its oil and gas services and equipment (OGSE) industry to reduce exposure to geopolitical shocks, volatile energy markets, and growing global competition.

The minister noted that recent disruptions around the Strait of Hormuz highlighted how quickly a crisis in one region could disrupt global supply chains and drive up energy prices. To address this issue, Malaysia must build greater resilience into its energy system by diversifying energy sources, broadening options through more diverse suppliers, technologies, infrastructure, and regional energy networks.

Akmal stated that energy security is not just about securing sufficient oil and gas supplies but also about the country's ability to absorb shocks, adapt when circumstances change, and continue serving the economy and its people during disruptions. He said Malaysia's energy policy must balance security, affordability, and sustainability without allowing one objective to undermine the others.

The minister acknowledged that Malaysia has a relatively diversified energy mix, with natural gas accounting for 42% of total primary energy supply in 2024. However, he emphasized that the country needs to broaden its options further by increasing diversity through various suppliers, technologies, infrastructure, and regional energy networks.