Malaysia Appears Well-Positioned to Weather Oil-Price Volatility

Dow Jones
Sep 10

0322 GMT - Malaysia's exposure to oil-price shocks is expected to remain moderate and manageable, RHB Chief Economist Barnabas Gan says in a note. Higher oil prices support fiscal revenue through stronger petroleum receipts and potentially larger dividends from Petronas, while lower prices provide relief by reducing fuel-subsidy costs, he says. Malaysian crude grades have continued to command significant premiums over global Brent benchmark, helping cushion revenue losses from lower outright oil prices, he says. Although these premiums are likely to normalize as geopolitical tensions ease, they have provided a buffer for export earnings and fiscal revenue. RHB expects Brent crude to fall to $85 a barrel by end-2026 and $75 a barrel by end-2027, assuming a renewed easing of geopolitical tensions.

 

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