WHEN the Strait of Hormuz closed in late February, Malaysia was supposed to be in serious trouble. Most analysts expected the worst: oil prices spiking, supplies disrupted, a regional economy in crisis. Some of that happened. But Malaysia coped better than expected. Growth forecasts were revised up rather than down, fuel supply stayed steady, and gas export commitments were met. A big reason was Petronas. That is exactly why what is happening to the company now deserves more attention than it is getting.
The question is not whether Petronas is run perfectly, or whether the complaints against it are baseless. Some are serious. The real question is simpler. Can a country keep leaning on its single strongest company from every direction at once, for tax money, in the courts, and during a crisis, without slowly wearing down the very thing that makes it so valuable?
Not your typical GLC
Malaysia has plenty of government-linked companies. Most survive only because they are shielded from real competition at home. Petronas is different. When the Petroleum Development Act was passed in 1974, the goal was not just to collect oil money. It was to build a company that could actually run a world-class energy business, by learning from the foreign oil giants, training local engineers over many years, and eventually competing with them as equals.
And it worked. The economist Pietro Masina has pointed out that Petronas is one of the very few companies in any former colony to have truly mastered such a complex global industry, from finding oil and drilling in deep water to shipping liquefied natural gas and running large international projects. Most countries with plenty of oil ended up with the money but never the know-how. Malaysia got both. Today Petronas operates in more than 100 countries, with sales offices in 22 of them, and it handled the Hormuz shock without needing anyone to bail it out.
What the debate leaves out
Most arguments about Petronas are about money: how much the federal government takes, how much Sarawak and Sabah get, and how much the company keeps. These are fair questions, and they come with real history. Sarawak and Sabah produce a large share of the oil and gas wealth, and the dispute over how much control they should have is now before the courts. Whatever the judgment, the practical effect of an unresolved dispute is the same: uncertainty that complicates long-term investment decisions. The point here is not to decide who is right. It is that every one of these claims, fair or not, lands on the same company. Petronas has to keep running the business while everyone argues over who gets what.
And here the wider experience is clear. The national oil companies that ran into trouble were not the ones asked hard questions about money; every state oil firm faces those. They were the ones whose governments treated them as a bottomless piggy bank. The pattern repeats: cash is taken out for years while too little is put back, until production slips, debts build, and the skilled people who made the company work begin to leave. The damage is rarely loud or sudden. It is quiet, investments not made and expertise walking out the door, until one day the company can no longer do what the country had always counted on. Petronas, still one of the best operators of its kind and nowhere near that trajectory, offers the contrast: companies like this are rarely broken in one go. They are worn down slowly, by demands that each look reasonable on their own.
Three pressures at once
Petronas went into 2026 already under strain. In 2025, before the crisis even began, its revenue fell 17% and profit dropped 18%, hit by lower oil prices and weaker sales. Then the strait closed, crude costs jumped almost 40%, and the company had to swallow higher shipping and insurance bills while keeping fuel flowing at home. On top of that, Sarawak is challenging federal petroleum laws in court. It is hard to commit to oil projects that take 15 to 20 years to pay off when the rules on who earns what are still being fought over. Each demand may be reasonable on its own. But all of them land on a company that is already stretched thin.
Built once
South Korea protects Samsung. Taiwan protects TSMC. Not out of pride, but because everyone knows that rebuilding companies like these would take generations, if it could be done at all. Malaysia built Petronas under conditions that no longer exist: the political clarity of the 1970s, a particular moment in the history of the oil industry, and the kind of long-term ambition that is hard to summon today.
The questions about how Petronas’s money should be shared are not going away, and they should not. But there is an order of priority here that often gets missed. A tax or royalty formula can be renegotiated next year. A court case can take however long it takes. The skill and experience that carried Malaysia through the closing of the Strait of Hormuz cannot simply be switched back on later. The Hormuz crisis will pass. The cost of getting Petronas wrong would not.
* Syed Farhan Syed Feizal is an energy and geopolitical analyst at the Global Asia Consulting.
** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.
