KUALA LUMPUR (May 23): In a recent interview with local radio station BFM 89.9, economic adviser at the Prime Minister’s Office Nurhisham Hussein said the current situation in Malaysia — where the public seem oblivious to the possibility of a fuel and energy shortage amid the US-Israel war with Iran — resembles the calm before the storm.

“I feel like we are in February 2020, when the [coronavirus] was just about to hit [our shores]. We were hearing all this news, yet everything was going on as normal. But by the following month, we were in [the middle of] a major crisis,” he added.

Just last week, International Energy Agency (IEA) executive director Fatih Birol said in a speech in London that the world may enter “the red zone” in July or August if the oil supply crisis brought about by the war with Iran does not improve. He added that the oil market surplus prior to the war, together with the IEA’s coordinated 400 million barrel strategic reserve release and commercial stock draws were not enough to resolve the crisis. 

Since the attacks on energy infrastructure in Iran and the closure of the Strait of Hormuz, some 14 million barrels per day of oil supply have been removed from global markets. Most of Asia’s oil comes from the Middle East, hence the scarcity is very real.

While noting that the severity of the Covid-19 pandemic is not comparable to the current global energy supply crunch, Nurhisham pointed out that many people appear to be taking the situation lightly, with little change to behaviour despite the ongoing developments globally. 

The reason could be because ordinary Malaysians are still enjoying subsidised petrol and have yet to feel the pain in a major way. But is the country insulated from the energy crisis? What is the situation on the ground and how prepared are we for a fallout from the oil supply crisis?  

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