Malaysia's Energy Balance Exposed to Oil Price Swings

Malaysia's energy balance is more vulnerable to oil price swings than previously thought, according to Kenanga Research. The country remains a net energy exporter, but its fiscal position is exposed to refined product prices through subsidies.

Malaysia runs a significant deficit in crude and condensate, with a RM30.4 billion shortfall in 2025. However, the country's trade position shows a crude oil deficit but a liquefied natural gas (LNG) surplus of RM45.4 billion.

The overall oil and gas surplus exists because of the LNG surplus, which accrues to a different fiscal line and arrives with a lag. As a result, higher oil prices protect the budget far less than the overall energy export position implies.