KUALA LUMPUR: A temporary closure or restriction of the Strait of Hormuz could sharply tighten supply, pushing up global crude oil and liquefied natural gas (LNG) prices, Economy Minister Akmal Nasrullah Nasir says.
He added that any closure of the vital energy transit chokepoint would pose a significant risk that industry players must closely monitor, as it could drive up risk premiums on energy imports and further strain global supply chains.
“We have seen oil prices spike sharply as markets factor in potential supply disruptions, and this matters to us in Malaysia because LNG, which Malaysia imports from Australia and other suppliers, is closely linked to global oil prices.
“So, any sudden increases can affect industrial energy costs, electricity generation and household fuel expenditures,” he said in his plenary address at the OGSE100 CEOs Forum 2026 here yesterday.
After a record-breaking financial performance in the year ended Dec 31, 2024 (FY24), Malaysia’s oil and gas services and equipment (OGSE) industry has been urged to diversify and boost exports to remain competitive and relevant.
Citing the Statistics Department’s OGSE Census 2024, Akmal Nasrullah said public-listed OGSE companies recorded 53% exports as a share of total revenue in 2023.
“But when we look at the industry as a whole, exports make up only 6% of total revenue,” he said.
“To me, that number is not discouraging. It is a signal of untapped headroom – a strategic ceiling waiting to be broken.”
Akmal Nasrullah said local OGSE players need to move beyond traditional service provision and become “technology-driven, low-carbon solution providers – export-ready, innovation-led, and capable of delivering complex projects to global standards.”
He added that strategic partnerships are now essential for scale.
“Whether through mergers, joint ventures, consortia or structured alliances, we need stronger Malaysian entities, able to bid bigger, deliver faster, and build long-term positions in international markets.”
He said the era of “being strong at home” is giving way to regional and global integration.
With cross-border initiatives such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Asean collaboration, Akmal said “borders are diminishing”.
“Malaysian companies will increasingly be measured against regional champions and global leaders, not just domestic peers,” he said.
Against this backdrop, Velesto Energy Bhd
president Megat Zariman Abdul Rahim said while Malaysia’s upstream capital expenditure (capex) is about US$5bil annually, South-East Asia as a whole sees US$20bil to US$25bil a year, noting that “75% to 80% of the cake” lies outside Malaysia. He added that only nine to 10 jackup rigs operate in Malaysia compared with 42 across the region.
“That shows that the market is really bigger outside of Malaysia,” he said, highlighting the need for Malaysian companies to demonstrate commercial value and build strategic partnerships abroad.
Addressing costs, Megat Zariman said collaboration with local companies is essential to leverage costs and understand supply chains.
“If we want to do business in Vietnam, for example, bringing everything from Malaysia would be expensive. We need to know where the supply chain and ecosystem are so we can take advantage,” he said.
He added that regulatory requirements, including entity setup and tax management, vary across countries, which can complicate operations.
“That’s why we engage local advisors and partners to guide us on how to operate in each market,” he said.
According to Malaysia Petroleum Resources Corp (MPRC), in FY24, when Brent crude oil averaged US$81 per barrel, Malaysia’s OGSE industry achieved a record revenue of RM94.5bil, up 12.5% from RM83.4bil in FY23. Profit before tax surged 95.2% to RM9.4bil in FY24.
MPRC said this was the highest recorded since it began tracking the sector in 2013, with historical data dating back to 2005.
However, the agency under the Economy Ministry tasked with developing the OGSE industry acknowledged that financial performance is likely to normalise in 2025, as upstream spending adjusts to softer oil prices – when Brent crude averaged US$69 per barrel – and weaker results from global oil majors. — Agencies
