This article first appeared in Forum, The Edge Malaysia Weekly on April 20, 2026 - April 26, 2026

Ceasefires in the Middle East are often fragile. As I write this, the supposedly two-week ceasefire between the US and Iran, brokered by Pakistan, is already showing signs of strain. Tensions are expected to drift towards escalation first, before hopefully an amicable solution is reached.

Still, at the centre of this latest Israel-led US war on Iran lies the Strait of Hormuz, the narrow corridor through which roughly a fifth of the world’s crude oil and liquefied natural gas (LNG) flows. Due to the war, the strait is no longer freely passable. This chokepoint is not merely a regional concern; it is one of the major transport arteries that fuel the global economy.

Supplies will be further restrained if there is no agreement between the warring parties and if the US blockade of the strait across the Gulf of Oman and the Arabian Sea to intercept vessels entering and leaving Iranian ports prolongs.

Worse could come if the Houthis of Yemen, allies of Iran, join the fray by choking the shipping lane of Bab-el-Mandeb at the tip of the Red Sea, another important energy route for the world economy.

As it stands, crude oil has breached US$100 per barrel more than once during the current war and has reached as high as US$160 for some physical cargoes. With the supply shortage not likely to be restored in the next couple of months, depending on how soon the conflict ends, prices will remain on the high side.

Hong Leong Investment Bank Research expects the crude oil benchmark Brent contract to remain elevated above US$100 per barrel for at least five months, based on the price behaviour seen during the early months of the Russia-Ukraine war in 2022.

The world economy has already felt the impact of crude oil shortages and high prices in supply chains and downstream oil-related sectors, which in turn affected more than 30 other major industries.

Here in Malaysia, the majority of the public still enjoys subsidised RON95 petrol at RM1.99 per litre, and cash support for diesel users in the agriculture sector and for private individuals has been raised from RM300 a month to RM400. However, Asean is already showing signs of shortage in both these products.

The equation is simple. Without new crude oil stocks coming via tankers through the Strait of Hormuz, some of the region’s refineries will face supply problems for feedstock, which is needed to produce petrol, diesel, cooking gas, jet fuel and naphtha for petrochemical plants.

You name it and you can start seeing the impact of price increases everywhere. The shortage of these products will put pressure on many sectors, from freight and insurance and airlines and transport that ferry the public and carry food, goods, parts and components, to the agriculture sector that uses fertilisers and plastic-based industries that rely on resins.

Even under these circumstances, the International Monetary Fund (IMF) has raised its projection for Malaysia’s gross domestic product (GDP) growth to 4.7% for 2026, an upward revision of 0.4%, showing the country’s economic resilience in facing the crisis. Nevertheless, the IMF warns an escalating and prolonged conflict risks an “unprecedented energy crisis” that could tip the global economy into recession.

As the lag-time impact from the supply chain reaches consumer shores, business will no longer be as usual. Expect the prices of many food items, goods, services and even toiletries and beauty products to rise. Malaysians should brace for more difficult times in the months ahead.

Economy Minister Akmal Nasrallah Nasir, in a televised briefing on the global energy crisis on April 14, said the economy is already showing the strain. The aviation sector saw 55 weekly flights involving six airlines cancelled between March 23 and 28, while tourist arrivals from March 1 to 25 recorded a decline.

Transport segments remain relatively stable for now, particularly cargo handling and public transport passenger movement. Basic food supplies remain stable, with sufficient stocks of rice, chicken, eggs, vegetables, fish, milk and fruits, and there is no immediate risk of disruption.

He said domestic animal feed prices are projected to rise about 8% while fertiliser costs are forecast to surge 15% to 20%, which could see production costs and consumer prices rising. This will become more visible in the coming months.

PETRONAS, which supplies about 50% of the country’s fuel — notably petrol and diesel — needs gave an assurance that supplies at its stations nationwide remain secure until June. The remaining 50% of the fuel supply should come from Shell, Petron, BHP and Caltex.

In the big picture, Minister of Investment, Trade and Industry Datuk Seri Johari Abdul Ghani also reminded Malaysians on April 14 that the government’s ability to shield businesses and consumers from the fallout of the Israel-led US-Iran war is constrained by limited fiscal space, heavy food imports and high energy prices.

The RM1.3 trillion debt means the government incurs high debt service charges, while food imports — which cost RM100 billion annually— will now definitely cost more. Fuel subsidies, while providing some cushion against the higher cost of living, are not sustainable in the long term as they have increased from RM700 million to RM7 billion per month.

Malaysians must bite the bullet now. We are in crisis mode.

How will the war between Israel-US and Iran end? What is the likely outcome in an ever-volatile Middle East where Israel’s military power, with nuclear weapons in tow, seems unchallenged?

At the time of writing, the US blockade in the Strait of Hormuz is still in place. US President Donald Trump is using this blockade card as part of his “art of the deal” tactic to force Iran to accede to most of the US’ and, indirectly, Israel’s demands.

While Israel and Lebanon announced a 10-day ceasefire effective April 17, and Trump indicated that a deal with Iran would follow, differences over an agreement remain wide. At the top of the list of demands is that Iran must freeze its uranium enrichment programme for 20 years. Iran had previously ruled out this restriction.

As for its nuclear weapons programme, Iran has persistently stated that it has no intention of building one, as indicated by the 2005 edict of the assassinated supreme leader Ayatollah Ali Khamenei, who declared the development and use of nuclear weapons forbidden under Islamic law.

Still, despite this assurance, and Trump saying that these facilities and capabilities had been obliterated in an attack last June, Iran was again attacked by Israel and the US under the pretext that it was close to waging a war by first striking military targets in Israel and US bases in the Middle East.

This is where Iranian distrust of the US lies: the US, in Iran’s view, serves Israel’s interests above all.

My take on Iran is this. Regardless of how the current conflict ends, even if it results in regime change and a democratically elected government that brings political and economic stabilisation, Iran will continue, over the long term, to strengthen its military capabilities.

I do not think Iran will soften its stance on improving its defence system. Future governments, in whatever shape and with whatever political beliefs, are likely to finance this expansion.

Iran would not like to be in the same position again, unable to prevent the likes of Israel and the US from dictating a war imposed upon it. It will not want to be bullied into submission and forced into a deal that would require it to give up its sovereignty.

It may no longer pursue a nuclear weapons programme, but it would want its supersonic missile programme to remain unhindered by foreign powers. If not, how else can it protect itself? The current war has seen the US and Israel destroy not only military targets but also schools, universities, bridges and civilian infrastructure, and killing thousands of civilians, including schoolchildren, all acts considered war crimes.

To prevent this from happening again, Iran, under whatever regime, will have to bolster its defence system. The Iran of the future will have no choice but to deepen further its alliance with China and Russia to counter external pressures.

Historians and international relations experts say that to understand Iran’s resilient behaviour, one must look beyond the current Islamic regime and consider Iran’s longer historical identity. Iran is not a newly formed state. Its civilisation spans thousands of years, over the pre- and post-Islamic eras, compared to the short 250-year history of the US.

Iranians are a proud people with a great civilisation and rulers. From Cyrus the Great (559-530 BC) comes the Cyrus Cylinder, often cited as the world’s first charter of human rights. Darius the Great (522-486 BC) saw the Achaemenid Empire stretch across three continents, becoming the largest empire of the ancient world at its peak.

During the Islamic era, Shah Abbas (1588-1629) of the Safavid dynasty transformed Isfahan into a global centre of art and trade, and his army fought off the Portuguese and the Ottomans. Nader Shah Afshar (1736-1747) invaded India and captured the Peacock Throne of the Mughal Empire.

These legacies form a deeply rooted sense of sovereignty and resilience. For such a nation, the ability to defend itself is not optional. It is existential. Military strength becomes not just a tool of policy, but a guarantor of dignity and survival.

This mindset is not unique to the current clergy or the Islamic republic.

Over the internet, I chanced upon a 1975 interview between the then Shah of Iran, Mohammad Reza Pahlavi, and a Canadian television station at the height of global inflation following the oil crisis, when crude oil prices rose from US$3 a barrel in 1973 to US$12 a barrel in 1975.

When asked about the Arab oil embargo, which Iran did not participate in but supported a price increase it considered fair, as the cause of hardship in the Western world, he defended it, noting that inflation had started well before Iran raised its oil prices.

While the West could push up prices of its commodities like wheat and iron but still wanted cheap oil, the Shah said Iran would not be cowed into accepting that the Western world was superior and could impose its will and wants on the Middle East. “We won’t be pushed around. We don’t seek war. But if it is imposed on us, we will not shrink … The Strait of Hormuz is our jugular vein. We live by it. No one can invade us without being forced to crush us, and we are not going to surrender.”

What makes this perspective significant is not merely its content, but the fact that it came from a leader who was installed by the US and the UK in 1953 following the overthrow of a democratically elected leader, Mohammad Mossadegh, who had nationalised the Iranian oil industry, previously controlled by the British-owned Anglo-Iranian Oil Company (now BP). The coup was meant to ensure that Iran would remain subservient to Western powers.

Even the Shah, considered a Western puppet by the Ayatollahs, placed importance on sovereignty, resistance and the necessity of military strength, and did not hesitate to weaponise the Strait of Hormuz. This kind of Iranian behaviour, I believe, is embedded in any type of government or regime.

So if Iran continues to pursue this military option to strengthen its defence, will there ever be a stable and peaceful Middle East?

The answer does not lie solely in a militarily powerful Iran or Arab countries. Peace in the Middle East will come if the US can rein in Israel and its extremist politicians who dream of a Greater Israel that would expand from Palestine into Jordan, Lebanon, Egypt, Syria, Iraq and parts of Saudi Arabia.

The US must push hardliner leaders in Tel Aviv to abandon this plan, which could ignite a full-blown war with the Muslim world that no one would like to see happening. Peace and prosperity in the Middle East, and the free flow of crude oil and LNG supply that powers the world economy, will come only if US presidents do not always dance to the tune of Israeli prime ministers and their powerful political lobbyists.

Unfortunately, for now, if left to politicians in Washington DC, this is easier said than done.

Azam Aris is an editor emeritus at The Edge

At press time, Iran says Strait of Hormuz is "completely open" to commercial ships for remainder of ceasefire

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