Malaysia Uses Neutrality to Weather Global Fuel Crisis
Malaysia is navigating the global fuel crisis by leveraging its policy of neutrality and non-alignment. The country imports about 40% of its crude oil through the Strait of Hormuz, a waterway that has been severely disrupted since the US-Iran conflict erupted in late February.
The disruption has led to a surge in fuel subsidy spending for Malaysia, which could reach RM40 billion by the end of 2026 if high global oil prices persist. However, the country is turning this crisis into an opportunity to strengthen its diplomatic relationships with other nations.
One example of this is when Iran cleared seven Malaysian-owned vessels to transit the Strait of Hormuz for free due to Malaysia being a 'friendly nation'. This was made possible by Malaysia's diplomatic ties with Iran, which were demonstrated when Prime Minister Anwar Ibrahim condemned the US and Israeli strikes against Iran as 'barbaric and illegal'.
Malaysia is also securing longer-term supplies from friendly partners such as Russia and Central Asian countries. For instance, Petronas secured rights to operate Blocks 9 and 10 in Turkmenistan's major gas-producing areas during Anwar's maiden visit there in June. Additionally, Russia pledged to provide Malaysia with long-term supplies of petrol, diesel, and gas for at least 20 years.