Kuala lumpur: The Ministry of Investment, Trade and Industry (MITI) has reported that the recent armed conflict between Iran and Israel has led to a surge in global oil prices. This escalation in oil prices has subsequently increased the cost of raw materials and logistics, affecting various strategic sectors within the country.
According to BERNAMA News Agency, the ministry highlighted that the situation is exerting pressure on import inflation and impacting production costs in key sectors such as electrical and electronics (E and E), chemicals and petrochemicals, automotive, and processed food. In response, MITI emphasized its commitment to monitoring any indirect impacts to ensure the continuity and stability of Malaysia's economy.
The ministry outlined its mitigation measures, including efforts to diversify sources of international supply and encourage investment in the local production of critical raw materials. This strategy aims to reduce dependency on foreign sources and strengthen economic resilience.
MITI's response was prompted by a query from Datuk Andi Muhammad Suryady Bandy (BN-Kalabakan), who sought an assessment of the conflict's impact on Malaysia's economic stability, particularly concerning energy geopolitics, global supply chain pressure, import inflation risk, and the sustainability of foreign direct investment (FDI) in strategic sectors.
The ministry expressed concerns about the potential of the Iran-Israel conflict to destabilize geopolitical conditions in the Middle East, especially in vital energy export routes such as the Strait of Hormuz. Malaysia has welcomed the ceasefire between the two nations, announced on June 24, 2025, to mitigate these risks.
Given the Strait of Hormuz's significance as a maritime passage handling about one-third of the world's oil trade, any disruption could significantly affect global markets, especially in Asian countries like China, Japan, and Malaysia.
MITI reaffirmed its dedication to protecting Malaysia's economic interests by implementing both short and long-term strategic measures. These include strengthening local industries, stabilizing supply chains, reducing production costs, and attracting high-quality FDI.
The ministry assured continued vigilance in monitoring developments in the Iran-Israel conflict and proactive measures to address its impact on national trade, supply chain continuity, economic stability, and the well-being of the Malaysian people.