Iran-Israel Conflict Triggered Surge In Global Oil Prices -- MITI

KUALA LUMPUR, Aug 18 (Bernama) --  The Ministry of Investment, Trade and Industry (MITI) said the recent Iran-Israel armed conflict led to a surge in global oil prices, which in turn increased the cost of raw materials and logistics.

The ministry stated that the situation had put pressure on import inflation and affected production costs in the country’s strategic sectors such as electrical and electronics (E&E), chemicals and petrochemicals, automotive, and processed food.

“As such, MITI will continue to monitor any indirect impact that may arise to ensure the continuity and stability of the national economy. As a mitigation measure, the government is intensifying efforts to diversify sources of international supply and to encourage investment in local production of critical raw materials to reduce dependency on foreign sources,” the ministry said in a written response published on the parliament’s website today.

MITI was responding to a question from Datuk Andi Muhammad Suryady Bandy (BN-Kalabakan), who asked for the ministry’s strategic assessment of the impact of the Iran-Israel armed conflict on Malaysia’s economic stability - particularly in terms of energy geopolitics, global supply chain pressure, import inflation risk, and the sustainability of foreign direct investment (FDI) in the country’s strategic sectors.

MITI said it views the Iran-Israel conflict as having the potential to undermine geopolitical stability in the Middle East, especially in critical energy export routes such as the Strait of Hormuz.

Accordingly, Malaysia welcomed the ceasefire between the two countries announced on June 24, 2025.

The Strait of Hormuz is a critical maritime passage that handles about one-third of the world’s oil trade, and any disruption could significantly impact global markets -particularly Asian countries such as China, Japan, and Malaysia.

MITI said it remains committed to protecting the country’s economic interests through the implementation of both short and long term strategic measures to strengthen local industries, stabilise supply chains, reduce production costs, and attract as well as retain high-quality FDI.

The ministry said it will continue to monitor developments in the Iran-Israel conflict and take proactive steps to address its impact on national trade, ensure supply chain continuity, preserve economic stability, and safeguard the well-being of the people.

-- BERNAMA