Prof. Geoffrey Williams, Founder and Director, Williams Business Consultancy Sdn Bhd
By : Mike Paul
Kuala Lumpur, Mar 11— Brent crude surged past US$100 per barrel amid the Iran‑US conflict, raising fears of cascading global inflation. In an exclusive interview with TNS News, economist Prof. Geoffrey Williams said markets are treating the spike as a short‑term disruption, but Malaysia and Asia have only a narrow buffer before deeper effects set in. “We are not in that position yet—but the buffer is 1 to 2 months, and we need to watch carefully,” he cautioned.
Oil prices briefly neared US$120 on March 9 before retreating to US$91.54 after President Trump signaled the conflict could end soon. Saudi Aramco warned of catastrophic consequences if the Strait of Hormuz remains disrupted, while the G7 stands ready to release reserves. Williams explained that aviation and shipping would feel the shock first, followed by food and manufacturing supply chains. “Higher oil prices eventually impact all prices—energy is an input into almost everything,” he said.
For Malaysia, the economist described a balancing act. “Malaysia benefits from higher oil prices through increased export revenues and stronger fiscal receipts via Petronas. But it also pays more in subsidies as domestic fuel prices are managed. So the net effect is not straightforward,” Williams noted. He stressed that Malaysia has a one to two month buffer before policy adjustments become urgent, but prolonged disruption could strain fiscal subsidies and accelerate calls for energy transition.
Globally, Williams dismissed fears of a 1970s‑style stagflation, citing robust growth and low inflation. He emphasized that central banks today have more tools, and economies are less energy‑intensive. However, he warned that if oil prices remain above US$100 for months, Asia’s heavy reliance on Gulf energy imports could trigger structural shifts in trade flows and investment in renewables.
“Whether prices reach US$120 to US$150 depends entirely on whether this remains a short conflict or escalates into something sustained,” Williams said. He added that Malaysia must monitor developments closely, as subsidy reform and energy diversification could become unavoidable if high prices persist.
- TNS News