US-Iran peace deal will have positive impact on oil prices, says PM’s aide

PETALING JAYA: The memorandum of understanding for a peace agreement between the US and Iran is set to have a positive impact on national oil prices, says political secretary to the finance minister, Kamil Abdul Munim.

However, he said the recovery period for oil supply is expected to take time, Bernama reported him as saying.

Kamil said global oil price stability cannot be achieved immediately, and the recovery will also need to account for the increased costs of logistics, transport and insurance incurred throughout the crisis.

The peace deal to resolve the crisis in the Strait of Hormuz would reopen routes for oil tankers as well as other merchant vessels, bringing relief to most countries affected by the crisis, he said after attending a function in Kuala Kangsar today.

Yesterday, Prime Minister Anwar Ibrahim expressed optimism that the MoU between the US and Iran could pave the way towards ending the conflict and guaranteeing peace in the Middle East.

Anwar expressed confidence in the positive development, even though a final agreement between the two nations must be reached within 60 days.

Kamil said to mitigate the impact of the crisis, the government has implemented various measures to control the country’s inflation rate, including maintaining the subsidised price of RON95 petrol at RM1.99 per litre, unlike other countries.

“The government, from time to time through the Economic Action Council, will look into the necessity of ensuring that for the next four to six months — while we wait for the situation to be fully controlled — the people are not burdened by any rising costs,” he said.

Regarding increasing the 200-litre limit per month for purchasing RON95 under the BUDI95 initiative, he said the government would re-evaluate its implementation before making any decision, depending on the global oil market situation.

Touching on the prime minister’s official visit to Russia, he said this was part of the government’s efforts to ensure it can diversify its oil and energy resources.

“Russia possesses extraordinary economic strength and potential. Malaysia, as a small trading nation, must capitalise on all available avenues,” he said.