Asian markets plunged on Wednesday, led by a dramatic selloff in South Korea, as investors rushed to unwind chipmaker bets amid rising fears that a prolonged Middle East war could trigger a sustained energy shock. South Korea Triggers Circuit Breaker KOSPI Index slumped more than 11%, prompting a circuit breaker. Two-day losses widened to 17% — the steepest since 2009 . The Korean won dropped to a 17-year low , compounding market stress. Elsewhere: Nikkei 225 fell 4.3% Taiwan stocks dropped 3.6% S&P 500 futures slipped 0.6% Key Point: Heavy profit-taking in semiconductor stocks amplified the regional selloff. Chipmakers had been among the hottest trades in recent months, driven by AI demand. Investors are now cashing out of crowded positions. Oil Surge Drives Inflation Fears Brent crude rose more than 13% this week to US$82.08 per barrel. Prices retreated slightly after Donald Trump ordered insurance guarantees for Gulf shipping and signalle...
Malaysian energy counters climbed to a 13-month high on Wednesday, defying the broader market weakness, as oil prices surged on escalating Middle East tensions and supply concerns.
Energy Index Breaks Higher
Bursa Malaysia Energy Index rose to its highest level in nearly 13 months.
Among the gainers:
Hibiscus Petroleum Bhd +3% to RM2.03, its highest since October 2024
Key Point: Malaysian energy stocks are outperforming as investors price in prolonged oil supply risks.
Oil Could Spike to US$150–US$200 if Conflict Drags
Brent crude is trading near US$82 per barrel, up 13% since the US military action in Iran began.
According to Schroders fund manager Malcolm Melville:
If the Strait of Hormuz is restricted for 4–5 weeks, oil could hit US$100–US$120
A prolonged conflict lasting months could push prices to US$150–US$200, exceeding previous all-time highs
The Strait of Hormuz handles roughly 20% of global oil and LNG supply, making it a critical chokepoint.
Upstream Names in Focus
Maybank Investment Bank said Malaysia’s oil and gas sector should attract stronger investor interest, particularly companies with upstream exposure.
Beneficiaries include:
Dialog Group Bhd
Petroliam Nasional Bhd (PETRONAS)
Higher oil prices would improve cash flows for PETRONAS and provide relief to services and equipment providers, many of which saw earnings decline in 2025.
Macro Boost for Malaysia
CIMB Securities highlighted potential balance-of-payments benefits:
Every US$5 increase per MMBtu in LNG prices could lift the current account by about 1.23 percentage points of GDP.
Malaysia may be the only top Southeast Asian economy to record a net improvement in its current account balance amid rising energy prices.
Key Point: Higher LNG and oil prices could strengthen Malaysia’s external balance and support the ringgit.
Inflation and Subsidy Implications
If Brent crude reaches US$100:
The government may raise subsidised fuel prices to RM2.05 per litre from RM1.99
Headline inflation could rise by about 10 basis points
Annual subsidy bill could fall by around RM1 billion
CIMB Securities expects inflation impact to remain manageable and does not foresee a hike in the overnight policy rate under this scenario.
Outlook
While broader equities remain volatile, Malaysia’s energy sector is emerging as a relative outperformer amid global supply risks.
The key variables ahead:
Duration of Middle East conflict
Stability of the Strait of Hormuz
Sustainability of oil prices above US$80
Overall theme: Rising oil prices are lifting Malaysian energy stocks while potentially strengthening the country’s external balance.
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