The former EPF chief strategy officer said the impact would persist even if the war ended anytime soon, as damaged supply chains and shut oil wells would take months to recover.
“We’re talking about basically the end of the year, maybe even into 2027, before we see normalisation of oil supplies,” he told BFM today.
Nurhisham, who heads the National Economic Action Council’s crisis management task force secretariat, said that reopening oil wells was not as simple as turning production back on.
As a result, he estimated that 12 to 13 million barrels of oil per day are currently “shut in” due to disruptions linked to the conflict.
“Shut in means you’re not just turning off the faucet – you’re actually cementing over the whole pipe. It takes a minimum of three months to reopen a well that’s been shut in.”
He said thousands of ships remained stuck around the Strait of Hormuz, and that the passageway would suffer heavy congestion once the strait opens up, further delaying supply recovery.
‘Just like February 2020’
Nurhisham said the government fears Malaysians are underestimating the seriousness of the crisis, comparing the current situation to the early days of the Covid-19 pandemic.
“I feel like we’re in February 2020. The virus is just about to hit. We’re hearing all this news. Everything’s going on normally. But the next month, we are in major crisis,” he said.
While fuel remains the primary concern, he warned the crisis would spread further into manufacturing and consumer goods through shortages of petrochemical feedstock.
“Our whole economy runs on plastics, it runs on nylon, it runs on polyester, it runs on naphtha and all these derivatives,” he said, adding that products ranging from hygiene items to automotive components could eventually be affected.
Nurhisham said June and July are expected to be a major turning point as businesses exhaust existing raw material stockpiles.
“We’re going to start seeing production stoppages. We’re going to start seeing people losing overtime, shift reductions,” he said.
While some alternative sources are available, he said, there are technical challenges, including longer shipping times and compatibility issues with existing manufacturing specifications.