Tighter Iran curbs could raise risks for Malaysian firms
KUALA LUMPUR: Malaysia could face some financial and trade-related risks if ship-to-ship transfers involving sanctioned Iranian oil continue off its waters, economists said.
Malaysia may encounter financial and trade-related risks if ship-to-ship transfers involving sanctioned Iranian oil persist in its waters, according to economists. These risks would primarily impact specific Malaysian companies and intermediaries rather than the nation as a whole, especially if they are found to have facilitated transactions that violate US sanctions.
The US has frequently cautioned countries against assisting or trading with Iran, threatening severe economic penalties. Dr Aimi Zulhazmi Abdul Rashid, an economic analyst at UniKL Business School, noted that Malaysian shipping companies, ports, insurers, and banks facilitating these sales could face secondary sanctions, including frozen US assets and exclusion from the financial system.
US Treasury Secretary Scott Bessent recently warned of a "D-Day" that would target Iran, escalating tensions in the sixth month of conflict. This could raise fuel and food costs, increase insurance premiums, and raise freight costs for Malaysia's exports of palm oil and liquefied natural gas. Malaysia's adherence to UN sanctions, while challenging at sea, may face increased pressure from the Trump administration.
Companies linked to sanctioned Iranian oil may encounter restrictions on accessing the US financial system, banking transactions, insurance, or international trade. Oil prices have surged above US$100 per barrel amidst the conflict, with further disruptions potentially causing production and supply route issues.
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