By: Noor Eszereen Juferi
SERDANG, 17 March – Escalating geopolitical tensions between the United States and Iran are expected to send shockwaves through the global economy, including Asia and Malaysia, with significant implications for oil prices, inflation and food security.
Senior Lecturer at the School of Business and Economics (SBE), Universiti Putra Malaysia (UPM), Dr. Taha Mohd Omar, said such conflicts typically trigger volatility in global markets as investors shift away from riskier assets like equities toward safe havens such as gold and the US dollar.
“This situation destabilises markets, increases inflationary pressure and, in many cases, slows global economic growth. The impact is not confined to the Middle East but is felt worldwide,” he said.
He added that the most immediate effect would likely be a surge in oil prices, particularly if disruptions occur in the Strait of Hormuz, a key artery for global energy trade.
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“Rising oil prices place significant pressure on Asian economies that depend heavily on energy imports. Fuel costs increase, electricity tariffs may rise and ultimately the prices of goods and services are affected,” he said.
According to him, the conflict also disrupts trade, with higher shipping and insurance costs and longer delivery times.
“This puts pressure on manufacturing and export sectors, especially industries reliant on energy and logistics,” he said.
In Malaysia’s context, Dr. Taha noted a mixed outlook, where higher oil prices could boost petroleum revenues while simultaneously increasing subsidy burdens and the cost of living.
“The government will need to strengthen more targeted subsidy policies and reduce dependence on fossil fuels through the development of alternative energy.
“In the short term, we may see inflationary pressure through transportation and food costs. Investor sentiment may also weaken, putting pressure on the ringgit and the local stock market,” he said.
Meanwhile, Deputy Director of the Agriculture Extension Division at the University Community Transformation Centre (UCTC), UPM, Prof. Dr. Norsida Man, warned that prolonged conflict in West Asia poses serious risks to global food security.
“Disruptions to major trade routes such as the Suez Canal could delay shipments of key commodities including wheat, corn and cooking oil. Rising oil and transportation costs will drive up global food prices,” she said.
She added that Malaysia remains vulnerable due to its reliance on imports for several key commodities, including wheat, meat and animal feed.
“Although the country’s rice supply is relatively stable, we still depend on imports for certain food items that are not suitable for domestic production, and exporting countries may also restrict exports to protect their own supplies,” she said.
Prof. Dr. Norsida noted that the government has introduced various policies such as the National Agrofood Policy and the Food Security Action Plan to strengthen domestic supply, including subsidies, incentives for farmers and food stock monitoring.
However, she said key challenges persist, including the small-scale structure of the agricultural sector, suboptimal productivity levels and high dependence on imports.
“Existing policies are adequate in the short term, but they must be strengthened to enhance long-term resilience against geopolitical shocks,” she said.
She emphasised that efforts to reduce import dependence must be strategic and balanced, including diversifying import sources, boosting domestic production of critical food items and developing buffer stocks.
“The transformation of the agricultural sector through technologies such as smart farming, automation and the use of artificial intelligence must be accelerated to improve efficiency and productivity.
“Investment in research and development, the development of climate-resilient seeds and strengthening domestic supply chains are crucial. At the same time, food waste must also be reduced,” she said.
Prof. Dr. Norsida also called for stronger regional cooperation and bilateral agreements to ensure more stable food supplies, while positioning food security as a key component of national security.
“Food supply is no longer merely an agricultural issue, but a matter of national security that must be addressed comprehensively,” she said.
