APRIL 10 — Malaysia is not on the battlefield in West Asia. Yet, it is already in the line of fire.
The ongoing disruptions in and around the Strait of Hormuz are not distant geopolitical tremors.
They are direct economic shocks reverberating across Malaysia’s energy systems, food supply chains, industrial base, and overall cost of living.
Even if the war were to stop tomorrow, the damage has already been done – and its aftershocks will linger.
Invariably, future studies and planning, based on the works of the International Institute of Future Studies (IIFS) led by Ziauddin Sardar and Scott Jordan are serious reflections that are crucial to Malaysia and Asean.
The first and most immediate blow comes from energy.
Roughly 20 per cent of the world’s crude oil transits through the Strait of Hormuz. Any disruption to this artery does not merely affect supply; it distorts global pricing mechanisms.
Malaysia, despite being an energy producer, is not insulated. It is deeply embedded in global pricing systems.
When crude prices rise, everything rises – transportation, electricity, manufacturing, logistics. Subsidies become harder to sustain. Fiscal pressure builds. Inflation seeps into every household.
Compounding this is the fact that Qatar – one of the world’s leading liquefied natural gas exporters – has already seen around 17 per cent of its LNG-related energy facilities affected. LNG is critical not just for power generation but also for industrial usage.
The disruption tightens supply and raises prices across Asia, including Malaysia.
The second shock is less visible but potentially more devastating: fertilizers.
Around 30 per cent of global fertilizer supply – especially urea and ammonia – originates from the Middle East. These are not optional inputs.
They are the backbone of modern agriculture.
When fertilizer prices spike, farmers reduce usage. Yields decline. Food prices rise.
Malaysia, which already imports a significant portion of its food, becomes even more vulnerable.
The cost of rice, vegetables, and livestock feed will not just increase – they will become more volatile and unpredictable.
The third disruption strikes at the heart of Malaysia’s industrial ambitions: semiconductors.
Approximately two-fifths of the world’s helium supply – critical for semiconductor manufacturing – is linked to flows affected by the Strait of Hormuz.
Helium is not a luxury commodity. It is essential for cooling systems in chip production.
Any disruption constrains output, raises costs, and undermines the reliability of supply chains. Malaysia, as a key player in the global semiconductor ecosystem, will feel this acutely. Delays, cost overruns, and reduced competitiveness may follow.
The fourth blow comes from sulphur – an often overlooked but indispensable industrial input. Roughly half of the world’s sulphur supply is tied to production and transport routes connected to the Gulf.
Sulphur is vital for fertilizers, chemicals, and refining processes.
When sulphur supply is disrupted, the effects cascade across multiple industries.
Production costs rise. Margins shrink. Industrial output becomes less predictable. Once again, Malaysia is not spared.
The fifth and perhaps most socially sensitive impact lies in animal feed.
More than one-third of global fodder supply is linked, directly or indirectly, to flows through the Strait of Hormuz. When these flows are disrupted, feed prices surge.
This translates quickly into higher prices for chicken, beef, dairy, and eggs – staples of Malaysian consumption.
The burden falls disproportionately on lower- and middle-income households. Food inflation is not just an economic issue; it is a social and political one.
Taken together, these five shocks form a perfect storm. Energy, fertilizers, semiconductors, industrial inputs, and food systems are all being hit simultaneously.
This is not a cyclical downturn. It is a systemic disruption.
And critically, it is not temporary.
Even if a ceasefire were to hold in West Asia, supply chains will not snap back overnight. Damaged infrastructure takes time to repair. Insurance premiums remain elevated long after hostilities cease.
Shipping routes require time to normalize. Strategic distrust lingers among producers and consumers alike.
In other words, the future has already been altered.
Malaysia must therefore confront a difficult but unavoidable truth: it is in a crisis – not of its own making, but one it must urgently manage.
The response cannot be incremental. It must be commensurate with the scale of disruption.
First, Malaysia must adopt a “bazooka-like” fiscal response targeted at cushioning households and small and medium enterprises.
Energy subsidies, while costly, may need to be recalibrated rather than abruptly withdrawn. A temporary moratorium on bankruptcies and insolvencies linked to supply shocks should be seriously considered.
Second, food security must be elevated to the highest national priority.
This includes expanding domestic production where feasible, securing alternative fertilizer sources, and strengthening regional supply arrangements within Asean.
Third, industrial policy must adapt rapidly. The semiconductor sector, in particular, requires contingency planning for helium shortages and supply chain disruptions. Strategic stockpiling and diversification of inputs are no longer optional.
Fourth, Malaysia must deepen and broaden its energy partnerships.
The Asean Power Grid, renewable energy investments, and diversified LNG sourcing must be accelerated. Energy security is now inseparable from national security.
Finally, Malaysia – together with Asean – must recognize that diplomacy in West Asia is not a distant concern. It is a direct economic imperative. Stability in that region underpins stability here.
The illusion that Malaysia can remain insulated from distant wars has been decisively shattered. Geography no longer guarantees safety. Interdependence ensures exposure.
Malaysia may not be at war. But it is already living with the consequences of one.
* Phar Kim Beng is a professor of Asean Studies and director at the Institute of International and Asean Studies, International Islamic University of Malaysia.
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
