SINGAPORE: Southeast Asian businesses are grappling with soaring costs as the Middle East conflict disrupts global oil markets. Roy Ang, a plastic bag manufacturer in Johor, reports a 10-13% increase in polyethylene resin prices, forcing him to raise customer prices by 5-10%.
Oil prices have nearly doubled since the conflict began, pushing up freight, logistics, and insurance costs across the region. In Indonesia, container shipping rates rose 25% within days, while fuel prices in Vietnam have surged 50%.
Businesses are adopting cautious strategies, absorbing some costs or gradually passing them on. However, energy-intensive sectors like manufacturing and logistics face tighter margins and slower hiring.
Malaysian and Indonesian governments are under fiscal pressure due to fuel subsidies, with Malaysia projecting a four-fold increase in its monthly fuel subsidy bill.
Experts warn that long-term solutions, such as renewable energy adoption and supply chain diversification, are critical for resilience.
A plastic factory in Klang, Selangor. (Photo: AFP/Mohd Rasfan)
Members of the SME Association of Malaysia in a meeting with the Minister of Entrepreneur and Cooperatives Steven Sim. (Photo: SME Association of Malaysia)
Workers load and unload containers at the Tanjung Priok International Export-Import Port in Jakarta on Feb 4, 2026. (File Photo: AFP/Bay Ismoyo)
Motorists queue at a gas station in Hanoi on Mar 10, 2026. Vietnam had announced that it was scrapping tariffs on fuel imports, as the US-Israeli war with Iran disrupts oil supplies and pushes prices to their highest level since 2022. (Photo: AFP/Nhac Nguyen)
Shipping company Samudera Indonesia's chief executive Bani Mulia said higher bunker prices have pushed up operational costs. (Photo: Bani Mulia)
Workers transfer harvested palm fruits to a transport truck before being processed into crude palm oil (CPO) at a palm plantation in Pekanbaru. (File Photo: AFP /Wahyudi)
A handout photo taken on Mar 11, 2026 released by the Royal Thai Navy shows smoke rising from the Thai bulk carrier "Mayuree Naree" near the Strait of Hormuz after an attack. (Photo: AFP/Royal Thai Navy)
A man fuels his motorbike with RON95 petrol at a petrol station in Johor Bahru on Oct 17, 2024. (Photo: CNA/Zamzahuri Abas)