Elevated Crude Oil Prices Will Result In Some Mixed Outcomes - Petronas

By Nor Baizura Basri

KUALA LUMPUR, March 11 (Bernama) -- Petronas said the elevated crude oil prices resulting from the US-Iran conflict are expected to produce some mixed outcomes for the company.

It said while higher prices are expected to boost revenue on the production side, these gains would almost certainly be offset by increased costs across the value chain, resulting in broader pressures on the national economy.

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"Higher crude oil prices may increase revenue from upstream production, but Petronas operates across the entire energy value chain. 

"This means that as prices rise, so do costs — for imported crude oil, refining, logistics, shipping and insurance, all of which are acutely affected when global supply chains are disrupted by geopolitical uncertainty," Petronas told Bernama here, today.

Petronas pointed out that the financial impact on the company is therefore far more complex than a simple revenue calculation.

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"Malaysia’s position adds another layer of complexity. Because the country imports a significant volume of crude oil and refined products, a sharp rise in global prices increases the national import bill considerably. 

"Shipping and insurance costs during periods of conflict further compound this burden. Fuel subsidy commitments also rise, placing additional pressure on national finances," said Petronas.

It also said that it operates with an explicit responsibility to support Malaysia’s domestic energy security, reliability and affordability. 

"This shapes how the company manages its operations and priorities differently from international oil companies that operate purely on commercial terms.

"Whether the net impact is positive depends on the duration of the disruption, how price trends evolve, and the extent of downstream cost pressures. Given the ongoing developments in West Asia, these variables remain uncertain," said Petronas.

While Malaysians can be assured that every reasonable measure is being taken, it should be acknowledged that the response will be adjusted as conditions change. 

To this end, Malaysians are advised to refrain from any fuel hoarding or panic buying, as this may exacerbate the situation unnecessarily. 

Petronas also pointed out that Malaysia’s domestic crude production has also declined steadily as mature fields naturally deplete. 

The country once produced over 700,000 barrels per day in the 1990s and early 2000s. However, today, domestic crude production averages roughly 350,000 barrels per day. 

Petronas’ refinery system, however, requires about 600,000 barrels per day of crude to meet national fuel needs —creating a structural gap that must be bridged through imports.

"This is why it is accurate to describe Malaysia as a net energy exporter overall —through liquefied natural gas (LNG) and other petroleum exports — while simultaneously being a net crude oil importer for domestic refining purposes. 

"Both things are true, and understanding this duality is essential to understanding Malaysia’s energy position in the current environment," said the national oil company.

-- BERNAMA