Anwar urges Malaysians to brace for higher costs, says global energy recovery could take up to 5 years

Malaysia Prime Minister Anwar Ibrahim on Thursday (April 9) urged Malaysians to brace for rising costs amid energy shortages as the Middle East conflict drags on into its sixth week. 

Addressing civil servants at the Malaysia Ministry of Transport, Anwar pointed out that shipping costs have surged due to rising insurance premiums, adding that soaring freight charges and looming fertiliser shortages threaten the nation's supply chain.

"The oil that was procured before the conflict has been delayed in the Strait of Hormuz...insurance premiums have surged by more than 100 per cent, while freight charges have also increased substantially. 

"This means that the oil that was initially expected to be processed at a lower cost in Pengerang is now significantly more expensive," Bernama reported the Malaysian prime minister as saying.

Earlier this week, Malaysia's Ministry of Foreign Affairs confirmed that a Malaysia-bound crude oil tanker has safely transited the Strait of Hormuz after being granted "safe passage" by Iran.

The tanker, Ocean Tanker, is reportedly loaded with about one million barrels of Iraqi crude, and is scheduled to reach Pengerang on April 17. 

Anwar also warned that fertiliser prices will rise given Malaysia's heavy reliance on imports. 

He also called on the civil service to "act proactively" in communicating with the public.

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Oil and gas operations could take up to 5 years to fully recover

The prime minister also revealed that Qatar's Emir Sheikh Tamim bin Hamad Al Thani told him recently that oil and gas operations will take a minimum of three to five years to return to full operational capacity, even if the war were to end tomorrow. 

"It will take a minimum of three years to undertake minor repairs to allow gas operations to resume, and probably three to five years to return to full operational capacity," The Star reported Anwar as saying.

Iran on March 19 struck the Ras Laffan liquefied natural gas (LNG) facility in Qatar, the world's largest LNG complex, a day after Israel attacked Iran's South Pars gas facilities.

The hit on Ras Laffan destroyed two LNG trains that could cause a reduction of around 17 per cent of Qatar's LNG gas exports for between three to five years.

QatarEnergy CEO Saad al-Kaabi said the state-owned gas company may have to declare force majeure on long-term contracts to Belgium, China, Italy and South Korea.

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