RISING global oil prices and renewed attacks on energy infrastructure are keeping pressure on Malaysia’s fuel-cost outlook, as Brent crude trades near US$109 a barrel and uncertainty persists over shipments through the Strait of Hormuz.
Brent futures eased to US$109.06 a barrel on Tuesday after reaching a five-month high of US$110.70 in the previous session, while the more actively traded December West Texas Intermediate (WTI) contract stood at about US$98.08.
The retreat reflected market reactions to a possible easing of US restrictions on Russian energy exports, although supply risks remain.
The conflict in the Middle East continues to threaten energy flows, with Iran maintaining pressure on shipping through the Strait of Hormuz, while attacks involving Saudi Arabia and Iran-backed Houthi militants have heightened concerns over regional energy infrastructure.
Russia and Ukraine have also resumed attacks on energy facilities.
Meanwhile, the US dollar edged lower on Tuesday, with the dollar index falling 0.05 per cent to 101.949 as investors weighed geopolitical tensions against the outlook for US interest rates.
The index, which measures the US dollar against a basket of major currencies, had climbed towards 102 on Monday, supported mainly by weakness in the euro amid unrest in France and other European countries, as well as escalating hostilities between Russia and Ukraine.
Investors also remained alert to developments in the Middle East, where clashes between Saudi Arabia and Iran-backed Houthi militants in Yemen continued and attacks on commercial vessels in the Strait of Hormuz heightened concerns over regional security.
The dollar weakened last Friday after Federal Reserve Chair Kevin Warsh refrained from signalling the outcome of the central bank’s upcoming policy meeting, while saying that hotter-than-expected inflation had not changed his assessment of the US economy.
The Fed has since entered its blackout period ahead of its October 27-28 meeting. Markets are pricing in an approximately 84 per cent probability that interest rates will remain unchanged, according to the figures provided.
The dollar index has fallen 1.51 per cent over the past four weeks but gained 3.05 per cent over the past 12 months with analysts’ expectations projecting the index at 101.481 by the end of the current quarter and 100.136 in one year.
For Malaysia, sustained oil-price increases could raise import and transportation costs and add to inflationary pressures, although the impact on consumers will depend on domestic fuel pricing and government subsidies.
The ringgit was trading at RM4.0823 against the US dollar on Tuesday, according to the figures provided, offering a relatively stable exchange rate for oil purchases priced in US dollars.
The government’s latest announced fuel prices for Oct 15 to 21 saw unsubsidised RON97 and RON95 petrol fall by five sen per litre to RM5.10 and RM4.62 respectively, while unsubsidised diesel dropped 10 sen to RM5.17.
The Finance Ministry attributed the reductions to the pricing calculation period and improving supplies of refined petroleum products in the region.
Eligible BUDI95 recipients continue to pay RM1.99 per litre for RON95, while eligible BUDI Diesel recipients pay RM2.10 per litre, according to the ministry’s published subsidy rates.
However, continued disruption to oil shipments and further attacks on energy infrastructure could renew upward pressure on global prices, leaving fuel costs and the wider inflation outlook vulnerable to developments in the Middle East and Eastern Europe. - October 20, 2026