Government Measures Keep Malaysia’s Oil Supply Secure Through End-2026

KUALA LUMPUR, JULY 2026 – Malaysia’s petroleum supply is expected to remain safe and sufficient until the end of 2026 following a series of government interventions introduced to manage disruptions in the global energy market.

The country’s oil and fuel supplies remained stable and adequate to meet domestic demand as of June, despite geopolitical tensions affecting the Strait of Hormuz since February 28. The government said it would continue monitoring petroleum stock levels closely throughout the second half of the year.

The measures were implemented gradually as uncertainty surrounding international shipping routes, physical supply constraints and declining global inventories raised concerns over Malaysia’s energy security. Earlier in the crisis, the government worked with Petroliam Nasional Bhd, or Petronas, and other oil companies to secure replacement supplies and prepare short-, medium- and long-term responses.

Malaysia’s strategy is centred on three main approaches: diversifying petroleum import sources, increasing domestic fuel availability through biodiesel and securing long-term supply agreements. These measures are intended to reduce the country’s exposure to disruptions affecting traditional supply routes.

Through Petronas, Malaysia has expanded its sourcing of crude oil and petroleum products beyond the Middle East. Additional supplies have been secured from South America, West Africa and Central Asian countries, including Turkmenistan and Uzbekistan, reducing dependence on shipments passing through the Strait of Hormuz.

The government has also accelerated the use of higher biodiesel blends to extend domestic diesel supplies. The blend was increased from B10 to B12 and later to B15, allowing more locally produced palm-based biodiesel to be used through existing infrastructure without requiring significant additional expenditure.

Enforcement has also been strengthened under the integrated Ops Tiris 4.0 operation to prevent leakages and the smuggling of subsidised fuel. Reducing illegal diversion is considered important because it allows existing petroleum stocks and government subsidies to be directed towards eligible consumers and essential economic sectors.

Authorities have identified 113 high-frequency indicators to support faster assessments of developments affecting energy and commodity supplies. A Global Supply Crisis Monitoring Dashboard has also been introduced to combine information on economic conditions, commodity prices, food supplies, energy and logistics.

Global crude oil prices have moderated from their earlier peak but remain exposed to geopolitical risks. Brent crude reached US$144.50 per barrel in early April before declining to US$99.29 per barrel between June 1 and 5, reflecting improved market sentiment following progress in peace negotiations.

Despite the decline, the government warned that physical supply limitations and lower global inventories remained significant risks. Any renewed disruption to shipping routes could increase transportation, insurance and energy costs, placing additional pressure on businesses and consumers.

The government has continued protecting eligible Malaysians through the BUDI MADANI RON95 programme, which maintains the subsidised petrol price at RM1.99 per litre. However, the policy has placed considerable pressure on public finances as global energy prices increased.

Prime Minister Anwar Ibrahim previously said the government’s monthly fuel subsidy expenditure had risen significantly during the crisis. The higher burden reflected its decision to absorb part of the increase in global prices rather than transferring the entire cost directly to consumers.

The government said it remained committed to ensuring essential supplies were sufficient, prices remained controlled and Malaysians were protected from the effects of uncertainty in the global market.