Kuala lumpur: Energy security will remain paramount as the global energy system comes under increasing strain from escalating geopolitical tensions in West Asia, Petroliam Nasional Bhd (Petronas) said today. Its president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz stated that if the entirely avoidable confrontation in the region unfolds in the worst possible way, many countries would directly feel the absence of energy security, if they have not already begun experiencing its impact.
According to BERNAMA News Agency, in ASEAN, a region of 700 million people, there has been a rapid succession of events: the Philippines declaring a state of emergency, Thailand indicating that its oil fuel fund will struggle to cope with cushioning price increases, and Vietnam beginning to impose travel limitations. In Malaysia, while the fuel subsidy remains, the government has temporarily adjusted the BUDI95 quota to 200 litres from 300 per month previously.
Governments across Asia are reportedly shifting back to coal to cover LNG shortfalls. This was highlighted by Tengku Muhammad Taufik during his keynote address at the Offshore Technology Conference Asia (OTC Asia) 2026. He emphasized that these developments underscore an uncomfortable dilemma, where efforts to pursue other priorities cannot come at the expense of energy security.
The Petronas CEO warned about disruptions at critical chokepoints such as the Strait of Hormuz, which handles roughly 20 million barrels per day, or nearly one-fifth of global oil consumption, as well as a similar share of global LNG trade. Such disruptions could trigger compounding consequences across industries, including fertilizers and other petrochemical-based products, ultimately impacting end consumers.
Tengku Muhammad Taufik also addressed the potential of rising costs and weakening demand signals to push the global economy towards stagflation. He stressed that without a readily available, affordable, and resilient energy system, a complete disruption to hydrocarbon flows would bring global activities to a halt. He noted that despite calls for an accelerated energy transition, hydrocarbons will continue to play a central role in current and future energy systems.
He further remarked that oil and gas are still responsible for 80 per cent of global energy supply, and petrochemicals are critical inputs for manufacturing, including solar PVs and wind turbines. On another note, he mentioned that Petronas is working collaboratively with the local oil and gas services and equipment (OGSE) industry through its Petronas Activity Outlook to uplift the sector, urging local OGSE players to evolve to become more competitive and capable in the highly challenging industry.