KENANGA thinks the market is no longer trading a simple war premium. Brent ended last week at USD92.69/bbl, but the more relevant issue is whether disruption in the Strait of Hormuz persists long enough to keep oil in a higher range for months rather than weeks.
“Our in-house base case now assumes a multi-month high-price regime, with Brent averaging above USD100/bbl over the next five months before easing towards USD90/bbl later in the year,” said Kenanga.
Under that path, Kenanga’s duration simulation lifts the implied 2026 Brent average to about USD94.8/bbl.
In their view, that is the key macro threshold. The longer oil stays elevated, the greater the risk that the shock broadens from energy into freight, food, distribution and inflation expectations.
For Malaysia, Kenanga thinks the commodity cushion is real, but not large enough to neutralise a persistent external oil shock.
Bank Negara Malaysia (BNM)’s decision to keep the overnight policy rate at 2.75% suggests policymakers are still prepared to look through the first-round move, but that comfort narrows if higher fuel and logistics costs begin feeding more visibly into broader prices.
Kenanga therefore continues to expect Malaysia to remain relatively resilient, supported at the margin by domestic demand and terms-of-trade gains, but still exposed to tighter financial conditions and wider second-round inflation pressure if disruption persists.
“We think Malaysia starts from a stronger macro position than many Asian net energy importers, but that cushion fades if higher oil begins feeding more visibly into freight, food and distribution costs,” said Kenanga.
Domestic demand has held up well, the external sector still has commodity support, and BNM has not signalled any need to react to energy volatility in isolation.
Growth has remained resilient in recent years, with our forecast still pointing to 4.6% in 2026.
That gives Malaysia some cushion, but not enough to make the economy immune to a more persistent external oil shock. —Mar 9, 2026
Main image: Alfa Laval
