Diversified Supply Shields Malaysia From Immediate Oil Disruptions -- MPRC
By Harizah Hanim Mohamed
KUALA LUMPUR, March 14 (Bernama) -- Malaysia’s oil supply remains stable, cushioned by diversified crude and product sourcing, as well as deepwater storage and terminal infrastructure at the Pengerang Integrated Petroleum Complex (PIPC).
Malaysia Petroleum Resources Corporation (MPRC) president and chief executive officer Mohd Yazid Jaafar said Malaysia remains operationally resilient and domestically supplied, supported by Petroliam Nasional Bhd (Petronas), national stock management, and existing facilities at PIPC and other locations.
MPRC is an agency under the Ministry of Economy mandated to develop and promote Malaysia’s oil and gas services and equipment sector, including strengthening industry capabilities, attracting investments, and supporting the internationalisation of Malaysian energy service providers.
He added that policy-level mechanisms could also be activated if the situation requires them.
However, Mohd Yazid highlighted that while Malaysia’s oil reserves are not a concern, the country, like most economies, is not fully insulated from global crude oil price movements, given that Malaysia still imports a meaningful share of crude and refined petroleum products.
“We are exposed to global oil price movements even as we produce and export higher-grade crudes. In practice, this means physical availability domestically remains stable, while pump prices and subsidy outlays are influenced by international benchmarks,” he told Bernama.
Malaysia’s refining sector typically imports heavier crude grades suited for domestic processing while exporting lighter sweet crudes produced offshore, which partly explains the continued need for imports despite being an oil-producing nation.
The issue has come into the spotlight amid concerns over global oil supply, after the International Energy Agency (IEA) hosted the Group of Seven (G7) energy ministers earlier this week and agreed to release emergency oil reserves as production and export disruptions tied to the Middle East conflict continue to strain global markets.
Shipments through the Strait of Hormuz have been disrupted, forcing some producers in the region to curtail output.
Approximately 20 per cent of the world’s daily oil supply and around 20 per cent of global liquefied natural gas (LNG) shipments pass through this narrow channel, making it one of the most critical chokepoints in global energy trade.
According to the Department of Statistics Malaysia, crude oil and condensate production increased by 1.1 per cent to 183.6 million barrels in 2025.
On a quarterly basis, crude oil and condensate production rose by 4.5 per cent year-on-year in the fourth quarter of 2025, compared with 7.9 per cent growth recorded in the third quarter.
Total production amounted to 47.8 million barrels in the fourth quarter of 2025, up from 45.1 million barrels in the third quarter.
The export value of crude petroleum and condensates increased to RM6.1 billion in the fourth quarter of 2025, compared with RM5.3 billion in the preceding quarter.
At the same time, LNG exports rose to RM13.6 billion in the same quarter, compared with RM12.2 billion previously.
Imports of crude petroleum and condensates declined to RM11.5 billion in the fourth quarter of 2025, compared with RM16.0 billion recorded in the third quarter of 2025.
Based on global reserves and production data, Malaysia had proved oil reserves of 2.7 billion barrels as of 2023, making it the second-largest oil reserve holder in Southeast Asia.
Although reserves have declined since 2022, 19 new discoveries were recorded in 2023, which could add more than one billion barrels of oil equivalent.
Of these discoveries, 16 were located in Sarawak, while three were in Sabah.
Responding to the IEA’s move, Mohd Yazid said the agency’s decision to release oil reserves could help alleviate immediate supply tightness in global markets.
“However, the geopolitical situation will continue to weigh on the supply environment. Maritime flows via the Strait of Hormuz and any further disruption to refineries and logistics in the region remain key factors to watch.
“The stock release buys time and cushions the shock, but durable price relief will ultimately depend on the security of physical flows resuming.
“This may take time even after the situation stabilises, as supply chains will need time to normalise,” he added.
Mohd Yazid also noted that Malaysia is not a member of the IEA and is therefore not obligated to participate in collective stock release actions.
“Instead, as a partner country, Malaysia collaborates with the IEA on energy policies and energy security,” he concluded.
-- BERNAMA