Malaysia faces economic shockwave if US-Iran conflict escalates

FOREIGN Minister Datuk Seri Mohamad Hasan said Malaysia faces widespread economic and security implications if the conflict between the United States and Iran escalates.

He said that any war that breaks out in the Middle East has the potential to disrupt global energy supplies, affect international trade and trigger price shocks that will ultimately affect Malaysia.

“A war involving Iran and the US will have a huge impact not only on Iran and the Middle East region, but also on the world and Malaysia,” he said during the Ministerial Question Time session at the Dewan Rakyat today.

Datuk Khlir Mohd Nor (PN-Ketereh) asked the government to state Wisma Putra’s assessment of the possibility of an armed conflict between Iran and the US and the implications for regional security.

Mohamad said tensions were rising following Washington’s firm stance on Tehran’s nuclear ambitions, as well as reports of an increased US military presence in the Persian Gulf, including the redeployment of the USS Gerald R Ford aircraft carrier from the Mediterranean.

However, he said diplomatic channels were still open. The Oman-facilitated talks showed positive developments as both sides agreed to continue discussions, including a follow-up session to be held in Geneva.

“This clearly shows that there is still an understanding to continue the talks,” he said, adding that Malaysia hoped both sides could de-escalate tensions and prioritise diplomacy.

Mohamad also warned that missteps could spark a wider conflict. Among the most serious risks was the possible closure of the Strait of Hormuz, a key strategic route for the world’s oil and gas shipments.

“If the Strait of Hormuz were closed, global energy supplies would be affected. Oil and gas supplies would be reduced, and prices could skyrocket,” he said.

Such disruptions, he added, would exacerbate existing pressures on the global economy, such as the supply chain and commodity shocks triggered by the previous Russia-Ukraine war. – February 26, 2026