Global oil prices seen stable at $80-$90/barrel, but risks loom

Global oil prices are projected to hover around $80 to $90 per barrel over the next three to six months, though they could breach $90 if tensions in the Middle East intensify. This forecast is influenced by several key factors, including supply management by OPEC+ and geopolitical developments.

According to UniKL Business School economic analyst Prof. Madya Dr. Aimi Zulhazmi Abdul Rashid, the disciplined production cuts by OPEC+ are expected to provide a floor for oil prices. However, geopolitical risks, particularly potential disruptions to major shipping lanes such as the Strait of Hormuz and the Red Sea, could add a risk premium to global oil prices. Conversely, if economic data from the United States and China indicates a significant slowdown, oil prices could fall back to around $75 per barrel.

Demand-side factors, including China's economic performance in the third quarter and winter demand in Europe and the US, will also play a crucial role. If the global economy remains resilient, strong demand is anticipated to continue supporting oil prices. As of late, Brent crude oil was trading at $89.38 per barrel, and West Texas Intermediate (WTI) was at $83.59 per barrel.

For Malaysia, the impact of global oil price fluctuations is twofold. As an exporter of oil and gas, the country stands to benefit from increased government revenue and earnings for Petroliam Nasional Bhd. (Petronas), which could improve the national fiscal position and dividend payments. However, as an importer of refined petroleum products, higher global oil prices will increase the cost of subsidies and strain government expenditure. This could also lead to higher logistics and transportation costs for citizens and small and medium-sized enterprises (SMEs), potentially pressuring core inflation. The primary challenge for the Malaysian government lies in balancing the benefits of higher oil and gas revenues against the rising costs of subsidies and the impact on the cost of living and business operations.

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Harga minyak global berisiko menembusi paras AS$90 (RM368.46) sekiranya konflik di Asia Barat kembali memuncak, namun secara asasnya dijangka kekal dalam lingkungan AS$80 (RM327.52) hingga AS$90 setong dalam tempoh tiga hingga enam bulan akan datang.