PETALING JAYA: The United Arab Emirates’ (UAE) exit from the Organisation of the Petroleum Exporting Countries marks a major fracture in the global energy landscape, removing around 12% of the group’s production capacity from coordinated control.
MBSB Research said the impact on Malaysia’s oil and gas sector will hinge on how the exit interacts with oil price movements around the US$100 per barrel level.
In the near to medium term, it said Malaysia’s primary concern is the ongoing blockade in the Strait of Hormuz.
“The blockade has created a two-four week lag in industrial inputs, causing gross domestic product growth to slow down to 5.3% in the first quarter of calendar year 2026,” the research house said. It highlighted that major industries like glove and technology rely on specialised chemicals and gases that often transit through the gulf.
MBSB Research said pure-play producers and oil and gas services and equipment players stand to benefit most in the short to medium term from the UAE’s exit and sustained oil prices around US$100 per barrel, while storage tanks and floating tankers leverage on potentially lower Brent crude oil prices in the long term.
At this juncture, the research house maintained its cautiously positive outlook on the sector, underpinned by the current geopolitical and economic landscape. The research house noted that despite the nature of the exit, the physical supply of oil globally has yet to surge, and this is largely due to the bottleneck in the Strait of Hormuz.
