PETALING JAYA: The escalating Iran war – one that US President Donald Trump has warned could drag on for four to five weeks or even longer – has uneven effects across corporate Malaysia, dividing companies exposed to the Middle East as clear winners or painful losers, while others remain largely insulated from the fallout.
In its latest note, Maybank Investment Bank Research (Maybank IB) named several listed Malaysian companies with exposure to the Middle East.
These include DXN Holdings Bhd
, MNRB Holdings Bhd, Wasco Bhd, Malakoff Corp Bhd and AirAsia X Bhd.
DXN, which has a manufacturing plant in Dubai, sees about 10% of its revenue from the Middle East region. As for MNRB, the Middle East and North Africa region contributes about 10% of its reinsurance division’s gross written premiums.
Wasco has a fabrication yard in Jebel Ali Free Zone, Dubai and pipe coating facility in Qatar.
Malakoff has associate stakes in power and water concessions in Saudi Arabia, Oman and Bahrain. These contribute about 25% to 30% of normalised earnings.
In the case of AirAsia X, its flights operated by Thai AirAsia X to and from Riyadh, Saudi Arabia, have been cancelled.
With regard to indirect beneficiaries, Maybank IB said Westports Holdings Bhd “could gain” if access to Dubai’s Port of Jebel Ali is cut off.
This would mean that transshipment volumes may need to be rerouted to South or South Asian ports, causing congestion at these alternative hubs including Westports in Port Klang.
“Similarly, Northeast Group Bhd may see upside from being the biggest supplier of photonic laser components to military original equipment manufacturing for defense systems against military drones,” the research house said.
The domestic oil and gas sector should also be attracting greater investor interest, especially those with directly-benefitting upstream assets, stated Maybank IB.
One of the potential beneficiaries is Dialog Group Bhd.
Meanwhile, sustained elevation in oil prices as a result of the Middle East conflict will also be a relief to national oil company Petroliam Nasional Bhd (PETRONAS), which reported a 21% year-on-year (y-o-y) decline in the core earnings of financial year 2025, to RM43.4bil.
The lower earnings were primarily due to lower realised energy prices as Brent averaged US$68 per barrel in 2025 versus US$70 per barrel in 2024.
In a separate note, Fitch Ratings said upstream producers in Asia-Pacific would benefit from higher realised prices as a result of the conflict.
On the other hand, the cost inflation would pressure the margins of downstream, energy and feedstock-intensive sectors.
“Higher input prices pose the main risk for chemicals, fertilisers and some metals, while interruptions to shipping could further strain working capital through delays and goods stuck at sea,” it added.
Meanwhile, Maybank IB pointed out that the expected improvement in cash flows will be a boon to local oil and gas, services and equipment companies.
Most of these companies reported lower earnings y-o-y in 2025, impacted by PETRONAS’ 23% y-o-y decline in capital expenditure spend.
Improved cash flows will also benefit the government’s petroleum-related revenues, which totalled 17% of total government revenue in 2025.
Earlier, the Finance Ministry had guided that the share may decline to 12.5% in 2026.
For 2025, PETRONAS delivered a dividend of RM32bil, but this will fall to RM20bil for 2026.
Maybank IB said the price of oil has effectively become the “fear barometer” for investors anxiously monitoring for potential contagion beyond Iran’s borders, especially regarding potential disruptions to oil tankers sailing through the Strait of Hormuz.
This choke point accounts for over 20% of global oil transit.
The Organisation of the Petroleum Exporting Countries and its allies has already moved to calm oil markets, announcing it would raise production by 206,000 barrels per day – recall the organisation had already raised production quotas by about 2.9 million barrels per day over April to December 2025.
“With current spare capacity residing mainly with Gulf neighbour Saudi Arabia, price suppressive effect of the latest hike is only likely to be felt as and when the Gulf is reasonably safe to navigate again,” according to Maybank IB.
