By Lok Chen Yue
Global energy markets are in turmoil. The conflict in the Middle East has sent oil and gas prices soaring, even if Monday’s surge was quickly reversed within the day. Nobody knows how long this will last. The Strait of Hormuz — the narrow waterway between Iran and the Gulf states through which roughly one-fifth of the world’s oil passes every day — has come under threat, and shipping has frozen to a standstill. Events there are entirely outside our control.
For most of our neighbours in the region, this is unambiguously bad news. Countries like the Philippines, Indonesia, and Thailand depend heavily on imported oil shipped through the Strait of Hormuz, or have thin financial reserves and thus limited room to manoeuvre. Their governments are already bracing for painful fuel price increases and the knock-on effects on food, transport, and other everyday costs. Several have already experienced episodes of panic buying or announced measures to reduce fuel usage.
Malaysia’s position is different. As an oil and gas exporter, Petronas benefits from a rise in global energy prices, and so does the federal government by extension. Our domestic gas supply for power generation is largely insulated from the disruption. We are not in crisis.
But “not in crisis” does not mean “nothing to worry about.” Malaysia still imports certain refined petroleum products. A prolonged disruption would push up the cost of keeping petrol prices stable, reversing some of the hard-won gains from last year’s subsidy rationalisation. And if global shipping routes stay disrupted and supply chains tighten, the effects will ripple through even the best-positioned economies.
The question for Malaysia is not “are we immune?” We are not. The question is: what is the smart, proportionate response to the current predicament?
The Lesson from Germany
Three years ago, Europe faced its own energy crisis, one far more severe than what Malaysia faces today. When Russia cut off gas supplies to Germany in 2022 in the aftermath of Russia’s invasion of Ukraine, doomsayers predicted economic collapse. Factories would shut. Joblessness would soar. Heating would run out in winter. Some suggested that GDP would contract by over 10%.
It didn’t happen. Germany and Europe adapted. Households turned down their thermostats. Industries switched to alternative inputs or bought energy-intensive goods from abroad rather than producing them at home. Alternative gas supplies were secured. The economic cost was real: a recession of around 0.5-1%. But this was nothing close to the predicted catastrophe.
The lesson is not that energy shocks don’t matter, but that people, companies, and governments are more adaptable than the worst-case scenarios assume — provided they act early, act sensibly, and don’t panic. Malaysia in 2026 has far more breathing room than Germany did in 2022. But breathing room only matters if it is used wisely.
What We Can Actually Do
There is a sensible middle path between complacency and panic. A set of low-cost, common-sense measures — many of which we should arguably be doing anyway — can meaningfully reduce our energy consumption in the short term, build up our precautionary buffers, and demonstrate the kind of national solidarity that makes difficult measures easier if they eventually become necessary.
Firstly, the government needs to lead by example in reducing its energy usage. A temporary reintroduction of a three-day work-from-home policy for desk-based civil servants costs almost nothing to implement — we proved during COVID that it works — and directly reduces fuel consumption, road congestion, and office electricity use simultaneously. A previous directive to set air conditioning in government premises to 25 degrees also provides a template for similar measures, such as reducing non-essential lighting and work travel.
The private sector, with appropriate government support and coordination, should also do its part. A partial return to working from home would be a boon for workers while reducing petroleum and electricity use. Staggered working hours for those who must be physically present would help by reducing their driving time. Traffic congestion is both a productivity and energy drain at the best of times; vehicles stuck in stop-start traffic burn more fuel than vehicles moving freely. Spreading the load across different start times delivers immediate savings with some coordination.
The government could also invite the largest commercial electricity consumers — major shopping complexes, industrial operators, and office towers — to publicly commit to reducing their energy use by, say, 10% over the crisis period. No enforcement or fines required, just a public pledge with recognition for those who participate. There are relatively easy measures, such as reducing operating hours by one hour a day, that businesses can take if the right signals are sent. Companies have their own cost-saving motivations to cooperate, and peer pressure is effective in changing behaviour.
The Shock That Opens Doors
Most of these measures make sense regardless of what happens in the Middle East. Flexible work arrangements improve productivity and talent retention. Increasing public transport modal share is a longstanding policy objective. Energy efficiency in commercial buildings reduces operating costs and contributes to our medium-term carbon reduction goals. The energy shock makes it easier to convince the public of their necessity.
Malaysia is better placed than most to come through this period with its economy intact and its position strengthened. But that outcome is not guaranteed. It requires a government willing to lead, a business community willing to adapt, and a public willing to make modest, temporary adjustments for the public benefit.
None of these proposals is dramatic. It is the kind of calm, pragmatic adaptation that Malaysians have shown they are capable of before. The challenge is real. The question is whether we choose to rise to it.