Malaysia's Oil Buffer Shrinks, Leaving Room for Costlier Second Shock

Malaysia is at risk of facing another expensive energy shock if supply disruptions occur again this year, analysts warn. Global oil reserves have already been drawn down by about 410 million barrels since the start of the war, leaving less room for another major disruption.

Jamil Ghani, an analyst, notes that some of the oil stocks used to cushion the first shock have already been depleted. If colder weather and higher seasonal demand coincide with another supply shock, prices could rise more sharply due to lower reserves available to absorb the impact.

Petronas has had to spend more to ensure sufficient supply for Malaysia through the first crisis. The national oil company's financial strength and flexibility are crucial in securing alternative supplies when normal routes are disrupted, Jamil emphasizes.