Fuel supply stable, oil prices may remain high for 2-3 years, says economist

Prime Minister's economic adviser Nurhisham Hussein stated that global fuel supply remains stable despite recent disruptions, according to Bernama. The drop in worldwide fuel levels is not affecting Malaysia, as the nation's supply stays consistent, Hussein told a media briefing on Friday.

Hussein also expressed confidence in Petronas' ability to secure sufficient supplies through the end of the year. The global fuel situation is fluid, he added, with risks leaning towards higher prices due to geopolitical tensions and shipping route disruptions.

Malaysia imports a significant amount of crude oil, yet it is a net exporter of liquefied natural gas (LNG). Global oil supplies have been severely impacted due to the ongoing conflict in West Asia, which started in February and shows no signs of resolution. The continuous US-Iran hostilities have also contributed to the problem.

Nurhisham believes that countries will only rebuild their oil reserves when prices drop to more reasonable levels, around US$80 per barrel. Consequently, he predicts a sluggish rebuilding of reserves by these nations. This situation implies that oil prices may stay elevated for the next two to three years, though they may not skyrocket. The Suez Canal and Bab-el-Mandeb remain open, even with ongoing threats, and the depletion of reserves will further add to uncertainty in the global energy market.