Strait of Hormuz risks could push oil above US$100 per barrel, Asia most exposed
KUALA LUMPUR: The potential closure of the Strait of Hormuz could sharply escalate geopolitical tensions in the Middle East and severely disrupt global oil supply chains, with Asia facing the greatest exposure, according to CIMB Securities.
The research firm underscored the strategic significance of the strait, which handles nearly 20 per cent of global oil flows. With global oil supply projected to increase by 1.5 per cent to 104.35 million barrels per day in 2025, based on US Energy Information Administration (EIA) forecasts, any disruption could lead to widespread consequences for global energy markets.
"Asia is particularly exposed, with China, India, Japan, and South Korea being the top destinations for crude oil moving through the Strait of Hormuz to Asia, collectively accounting for 69 per cent of crude oil and condensate volumes transported through the strait in 2024.
"Any disruption to these flows could drive a renewed surge in oil prices, with inflationary spillovers extending across global economies," it said in a note.
It said crude oil prices are expected to rise amid recent geopolitical tensions, with heightened volatility likely to continue in the short term.
CIMB expects Brent crude to trade around US$85 per barrel in the near term, with volatility likely to persist amid elevated geopolitical risks.
"Our analysis indicates that a supply disruption of 500,000 barrels per day (bbl/day) could result in a price increase of approximately US$10 per barrel, based on historical events.
"The international sanctions imposed on Iran in 2011 to 2012 led to a supply loss of 1.4 million bbl/day, resulting in a US$30 per barrel increase in crude prices during that period. That said, the current global oil market is better cushioned by available spare capacity," it added.
CIMB noted that OPEC+ currently has an estimated excess capacity of 5.7 million bbl/day, with Saudi Arabia and the United Arab Emirates contributing around 4.2 million bbl/day of that total.
However, it highlighted a key risk: most of this supply is transported through the Strait of Hormuz, making it particularly vulnerable.
"In our view, should the proposed closure of the Strait of Hormuz materialise, the risk premium could surge, potentially pushing Brent prices above US$100 per barrel," it added.
The research house highlighted Dialog Bhd as a potential beneficiary of rising oil prices, mainly due to its upstream portfolio.
The company currently operates three producing assets, including full ownership of the Bayan oilfield service contract, a 20 per cent stake in the D35/D21/J4 production sharing contract, and a 50 per cent interest in the L53/48 concession in Thailand.
"These assets contributed approximately 35 per cent to Dialog's financial year 2024 core net profit. We estimate that every US$10 per barrel rise in the average Brent oil price assumption will boost Dialog's financial year 2026 core net profit by 2 per cent," it said.
CIMB's current forecast assumes an average Brent oil price of US$71 per barrel for 2025.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
3 hours ago
- Malay Mail
Momcozy Launches Prime Day Sale: Exclusive Flash Deals on Maternity and Baby Essentials
NEW YORK, US - Media OutReach Newswire - 29 June 2025 - Momcozy, a global maternity and baby care brand trusted by millions of mothers, announces its Prime Day Sale from June 27 to July 11, featuring discounts up to 60% on top-selling products, including wearable breast pumps, baby monitors, postpartum recovery items, and maternity deals from July 1 to July 7 highlight popular Momcozy items, including the M5, M6, and M9 wearable breast pumps, nursing bras, baby monitors, baby carriers, belly bands, and bottle washers. Customers can access these deals using promo code PD2025 at introduces tiered savings to incentivize bulk purchasing. Orders totaling $480 automatically receive a $105 discount (approximately 22% savings), while purchases over $540 get $135 off (around 25% savings). Additionally, special volume discounts on nursing apparel are available—buy three nursing bras for 25% off or four bras for 30% off.A featured highlight is the 'Mom + Baby' bundle, offering a 20% discount when using promo code PD2025. This comprehensive package provides essential products for pregnancy, postpartum recovery, and infant care, simplifying the shopping process for expectant and new product deals, Momcozy introduces a referral incentive program valid through July 31. Customers can earn up to $30 in coupon credits by referring friends, who also receive exclusive savings. Referral credits remain valid for future use beyond the Prime Day sale, although they cannot combine with other Prime Day Sale aligns with rising consumer demand for practical, high-quality parenting tools. With products available in over 60 countries, the brand is renowned for quiet, portable breast pumps, innovative baby care equipment, and comfortable maternity apparel designed to meet real parenting all Prime Day offers and referral incentives at . All promotions are valid while supplies #Momcozy The issuer is solely responsible for the content of this announcement. About Momcozy Momcozy is a global maternity and baby care brand trusted by over 3.6 million mothers. Based in New York and founded in 2018, the company offers wearable breast pumps, nursing apparel, postpartum essentials, and infant care accessories designed to support moms from pregnancy through early childhood. The brand is committed to creating practical, research-informed solutions that make everyday care easier, more efficient, and more comforting. For more information, visit
The Star
6 hours ago
- The Star
Hong Kong has potential to become green marine fuel hub with Beijing's backing
Hong Kong can become a regional trading hub for green marine fuel and help augment China's influence on supply and pricing, according to an industry player. 'Hong Kong's advantages lie in its roles as an international free port, shipping and financial hub, and the government's willingness to support energy transition and green finance,' said Leo Yang Xiaohu, president of CIMC Enric Holdings, which built the city's first hydrogen refuelling station and related infrastructure in 2023. By boosting domestic green fuel demand, Hong Kong can help Beijing fend off trade barriers overseas and enhance the nation's influence on its pricing, Yang said in an interview on Wednesday. 'If Hong Kong can develop a trading hub, we can have a bigger say in green fuel trading and pricing,' Yang said. The European Union, the world's largest biodiesel market, last August imposed anti-dumping duties on Chinese biodiesel, prompting producers to seek alternative markets. Last year, the government published an action plan to develop Hong Kong into a green fuel bunkering or shipping-fuel supply centre. In February, Financial Secretary Paul Chan Mo-po pledged to provide tax exemptions for importing and consuming green methanol. Secretary for Transport and Logistics Mable Chan Mei-po said in a statement on Wednesday that the Marine Department would gazette the code of practice for methanol bunkering this month. The Marine Department will also launch a scheme this year offering incentives of up to HK$1 million (US$127,400) for companies that provide green fuel bunkering. The city could also offer vessel operators financial and customs clearance advantages for buying green marine fuel, Yang said. He added that banks could provide green financing and help shippers trade carbon emission permits to incentivise the use of green fuel and the construction of supporting infrastructure. CIMC Enric, a liquefied natural gas storage and logistics equipment maker, is a subsidiary of state-backed container maker China International Marine Containers (Group). The company is constructing a plant in Zhanjiang, western Guangdong Province, with an annual production capacity of 50,000 tonnes of green methanol converted from agricultural and forestry waste. Yang said the plant would be ready in August, and pilot production was expected to start in October. The plant's capacity could be raised to 200,000 tonnes by next year, he added. Compared with conventional fuel, renewable methanol could slash carbon dioxide emissions by up to 95 per cent, according to the Methanol Institute, a global trade association representing the world's leading methanol producers, distributors and technology companies. The demand for green fuel will surge as shipping firms align their fleets to meet the International Maritime Organisation's targets to cut greenhouse gas emissions by at least 20 per cent by 2030 from 2008 levels, and by at least 70 per cent by 2040. A few bunkering firms had expressed an interest in green methanol from CIMC Enric, and some shipping firms were also interested, Yang said. The company's equipment was capable of processing five types of biomass waste, and it had secured enough waste supply to produce up to 250,000 tonnes of the fuel, he added. CIMC Enric signed an agreement on Wednesday with the Transport and Logistics Bureau to supply green methanol for bunkering. Hong Kong and China Gas (Towngas), the piped-gas supplier, also signed an agreement with the bureau to supply green methanol that complies with international standards and to use the city as a trading and settlement hub for green maritime fuel. Towngas also said the annual capacity of its waste-to-green methanol plant in Inner Mongolia would rise to 150,000 tonnes by the end of the year from 100,000 tonnes currently. The company said it planned to build multiple plants with Foshan-based natural gas distributor Foran Energy, with an overall annual capacity of one million tonnes. The first facility, with a capacity of 200,000 tonnes, would be commissioned in 2028, it said. -- SOUTH CHINA MORNING POST
The Sun
7 hours ago
- The Sun
Balancing innovation and responsibility
MALAYSIA is racing toward a digital future – one powered by a booming data centre industry projected to consume over 20 GW of electricity by 2040, as forecast by the Ministry of Energy Transition and Water Transformation (Petra). This explosive growth is unlocking vast economic potential but also highlighting the way that Malaysia must balance the demands of a thriving digital economy with the environmental challenges it brings. According to Deputy Investment, Trade and Industry Minister Liew Chin Tong, Malaysia's data centre industry has witnessed substantial growth, with investments totalling RM184.7 billion from 2021 to December 2024 thanks to the increasing demand for cloud computing, artificial intelligence (AI), and digital services. Our proximity to Singapore, which imposed a moratorium on new data centres due to resource constraints, has further enhanced Malaysia's appeal. Local communities, particularly in Johor and Selangor, are seeing new employment opportunities and infrastructure development as global players establish operations in these regions. Reuters reported that the investment made by one of the world's largest technology companies in Malaysia is expected to generate approximately US$10.9 billion in new revenues over the next four years and create more than 37,000 jobs, demonstrating the sector's potential to drive national growth. The economic benefits are clear. Faced with significant opportunities for growth, it's all the more important that we carefully consider our responsibilities to the wider community, and the impacts on the places we live and work. The impact that data centres pose to the environment needs to be carefully managed. Malaysia's Ministry of Energy Transition and Water Transformation has projected that electricity demand from data centres, which require continuous power and extensive cooling systems, will reach 7.7 GW by 2030 and could surge to 20.9 GW by 2040. To mitigate these issues, the government has implemented several forward-looking initiatives. The National Energy Transition Roadmap (NETR), introduced by the Ministry of Economy, aims to achieve 70% renewable energy capacity by 2050, an ambitious leap from the current 25%. Additionally, the Corporate Renewable Energy Supply Scheme (CRESS) allows data centre operators to source energy directly from green power producers, bypassing the national grid. The significant amount of water required to cool data centres have also raised alarms. The National Water Services Commission (Suruhanjaya Perkhidmatan Air Negara/SPAN) warns that unchecked water usage by data centres could contribute to a water crisis. In response, several strategies have been adopted to manage water consumption. Water Usage Effectiveness metrics help track and promote efficient water management practices within data centres while companies have collaborated with state-owned entities to develop recycled water supply schemes, reducing reliance on potable water. There is also growing interest in alternative cooling technologies, including immersion cooling, which can significantly lower both water and energy consumption. These are important strategies, and it is critical that we continue to build on this work to ensure that we are balancing our economic growth with the urgent need for environmental stewardship. We know that collaboration between public and private sectors is an essential part of ensuring responsible growth of any sector, so it's great to see that the government has taken a proactive stance in regulating and guiding the development of data centres. The Ministry of Investment, Trade, and Industry's guidelines outline best practices for energy and water efficiency, safety, scalability, and the adoption of smart technologies. Environmental Impact Assessments are mandatory for projects with significant ecological implications to ensure new data centres consider and mitigate environmental impacts. Government incentives, including potential tax breaks, also encourage green practices such as renewable energy integration, advanced cooling systems, and efficient water usage. Beyond government action, industry stakeholders are actively contributing to responsible practices within the data centre ecosystem. The YTL Group 2024 Sustainability Report highlighted that YTL Green Data Centre Park in Johor integrates advanced technologies and energy-efficient designs including solar-powered infrastructure, advanced cooling systems, and rainwater harvesting systems to minimise environmental impact while ensuring high performance. With an expected capacity of 500MW, the park stands as a regional benchmark for balancing technological advancement with environmental responsibility. We have also seen leading global data centre providers focusing on energy efficiency to meet their carbon neutrality goals and investing in rooftop solar panels and virtual power purchase agreements for solar farms. Addressing the dual priorities of economic development and environmental sustainability requires a multi-pronged approach. One potential solution is the development of responsible data centre certification programmes. By creating a national certification that evaluates facilities on their energy efficiency, water usage, and carbon emissions, the government can incentivise more sustainable choices. Another opportunity lies in regional collaboration, where Southeast Asian nations work together to share technologies, regulatory best practices, and renewable energy resources. Investment in research and development is also crucial. Government grants and private sector initiatives can support the creation of advanced cooling systems, AI-driven energy management, and water recycling innovations tailored to Malaysia's tropical climate. Lastly, transparent reporting and environmental accountability must be prioritised to ensure measurable progress and public trust. Malaysia stands at a pivotal crossroads: the path forward must blend innovation with responsibility. By fostering collaboration across government, industry, and academia, Malaysia can lead Southeast Asia not just in digital capability, but in responsible digital leadership. Achieving this vision will require actionable policies, measurable standards, transparent reporting, and shared accountability.
