Malaysia Oil & Gas Sector Stays Neutral Amid Iran-US Tensions

Summary: The Malaysia Oil & Gas sector holds a NEUTRAL rating despite the US’s “Operation Midnight Hammer” strikes on Iranian nuclear sites on June 21, 2025, marking its first direct involvement in the Israel-Iran conflict. Iran’s parliament approved a potential Strait of Hormuz closure on June 22, though no final order has been issued. The strait, vital for 20% of global oil and 25-30% of LNG exports, has never fully closed despite past threats. Analysts maintain a Brent price forecast of USD67/bbl, with top picks Dialog and BArmada, citing limited supply disruption risks but noting potential price spikes if closures occur.

Segments and Briefs: Oil & Gas Sector

1. Conflict Heightens; Uncertainty Lingers: Introduces the US strikes on Iran and the NEUTRAL stance, setting the context for oil and gas market uncertainty.
2. Potential Closure of Strait of Hormuz?: Discusses Iran’s parliamentary move to close the strait, highlighting the need for Supreme Council approval and its low likelihood.
3. The Strait of Hormuz Has NEVER Been Fully Closed: Provides historical context of past threats and the strait’s critical role in global oil and LNG exports.
4. Upside Risks if Actual Supply Disruptions Happen: Analyzes the economic impact of a closure on Iran and potential short-term oil price increases if supply is disrupted. Source: Maybank

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