How Will The US-Iran War Affect Malaysia And The Rest Of The World?

“War. What is it good for? Absolutely nothing.”

If you grew up in the 90s like me, you would know the lyrics above from a scene in the film, Rush Hour, that hit cinemas back in 1998. Edwin Starr’s anti war song was famously played out during one of their more iconic scenes.

The moment I caught wind of what’s happening in the middle east, the song automatically played in my head. Because if you really think about it, only warmongerers benefit from this war. For the rest of us, the lyrics sing true – “What is it good for? Absolutely nothing!”

If you’re curious how it came to this, you just have to open the portal to a major news outlet and they’ll bring you up to speed. But if you’re already aware, let me break it down for you how it’s going to directly impact us and the rest of the world.

Surge In Oil Prices

With at least 3 oil tankers damaged in the strait of Hormuz, the traffic is near to a standstill, as all parties are wary amidst the conflict and the frenzy of missiles spreading across the gulf. With the exportation of crude oil being halted, many countries will get affected. Cargo operators right now are holding their breath. Because they never know, one wrong move right now could just lead to catastrophe.

With the exportation of crude oil effectively coming to a halt, the shockwaves are being felt beyond the Gulf. According to analysts, Europe will be heavily affected by this, and will most likely need to tap America’s strategic reserves. China, who gets most of their oil from Iran itself, is in their own precarious position. Although they have not come out and made an official statement, if the conflict goes on for a longer period, it is safe to assume that Iran will be keeping their oil for their own use rather than for exportation.

The numbers alone tell you everything – roughly 20 million barrels of oil pass through the Strait of Hormuz every single day. When that tap gets threatened, the entire world feels it.

This then brings us to our next matter… 

Impact On International Trade

The UAE and Qatar have long served as one of the major connections between Asia and the rest of the world for trade, logistics, and commerce. Now that the air is shrouded in uncertainty, flight paths are being rerouted, shipping lanes are being avoided and the region’s ports are operating under the threat of missile strikes. Every delay, every rerouted and grounded transport, all adds up which leads to longer waits and tighter supply chains.

Limitations On Travel

Many travellers are left stranded amidst the chaos as flight plans are either halted or delayed due to the conflict. The UAE, to its credit, took it upon themselves to provide assistance by activating their aviation support plan to cover accommodations, meals and rebooking costs for more than 20,000 travellers who are stranded across the country’s airports.

For Malaysians who are planning to travel west anytime soon may have to reconsider or reschedule their plans. But if you’re heading east (Japan, China, Korea, etc.) you’re safe to proceed as planned.But keep a close eye on updates, because the situation is changing every day, if not every hour.

Distance Is Just An Illusion

There’s a comforting lie we tend to tell ourselves whenever conflict breaks out somewhere far away: “It’s not our problem.” But the world stopped working that way a long time ago. We are all woven into the same economic fabric, the same supply chains, the same currency markets. When one thread is pulled violently, the whole thing shifts.

Malaysia’s lifeblood has always been trade. And with the Ringgit sitting at its strongest point in nearly eight years, it’s hard not to ask the question that’s been quietly sitting in the back of everyone’s mind – will this conflict undo what we’ve worked so hard to rebuild?

Nobody knows yet. But the fact that we’re even asking the question should be enough to cause us worry.

“War! What is it good for?
Absolutely nothing.
Say it again.”
– War, Edwin Starr