KUALA LUMPUR, April 18 — Malaysia produces crude oil, but it still relies heavily on imports to meet domestic fuel demand that is nearly double local output, while global supply disruptions are also pushing up costs across the oil supply chain.The situation reflects both structural supply gaps at home and rising volatility in international oil markets following tensions in West Asia, the Finance Ministry explained today.Malaysia continues to operate a “sell high, buy low” strategy, exporting higher-value crude while importing other grades of oil to ensure sufficient supply for domestic consumption.This allows the country to maximise revenue from exports while keeping enough crude available for refining petrol, diesel, liquefied petroleum gas (LPG) and jet fuel locally.Why does Malaysia still import oil despite being a producer? Malaysia’s domestic oil consumption stands at about 700,000 barrels per day, nearly double its production of around 350,000 barrels per day.This imbalance means the country must import roughly half of its crude oil needs to keep fuel supply stable.Even though Malaysia produces oil, local output alone is not enough to meet demand across transport, industry and aviation sectors.The ‘sell high, buy low’ strategyMalaysia exports premium crude oil that fetches higher prices globally while importing other crude grades that are more cost-effective for domestic refining.The Finance Ministry said 48 per cent of petroleum products are refined by Petronas, while the rest is processed by other oil companies operating in the country.This structure supports both export earnings and domestic fuel availability under a single integrated supply system.The Strait of Hormuz linkThe Finance Ministry said the conflict in West Asia has disrupted global oil supply chains, including transport routes and delivery timelines.A key concern is the Strait of Hormuz, through which about 20 per cent of global oil trade flows. This includes nearly 40 per cent of Malaysia’s crude imports.Disruptions in the waterway have contributed to delays in shipments and higher risk premiums for shipping and insurance.Crude oil prices have risen by almost 40 per cent, with additional increases in logistics and insurance costs further raising overall supply chain expenses.When demand is higher than production Malaysia sources about 48 per cent of its crude oil domestically, while 38 per cent is imported via the Strait of Hormuz, with the rest coming from South-east Asia, West Africa and other regions.But most crude oil used in local refineries still needs to be imported because domestic production cannot fully meet national demand.Prime Minister Datuk Seri Anwar Ibrahim has previously said Petronas is now a net importer of fuel, reflecting Malaysia’s shifting energy balance.Petronas confirmed the arrival of its tanker Ocean Thunder this morning with its cargo of one million barrels of crude oil from Basrah, Iraq, as part of efforts to stabilise fuel supply.Despite being an oil-producing country, Malaysia’s reliance on imports – combined with global disruptions like those affecting the Strait of Hormuz – means both supply security and costs are increasingly tied to international developments.