Oil Prices Plunge to Lowest Since US-Iran War

Oil Price Plunge: Definition and Context

The recent oil price decline refers to the sharp drop in global crude oil benchmarks, with Brent crude falling to its lowest level since the US‑Iran conflict of early 2020. This event is driven by a combination of geopolitical tensions, weakening global demand, and production decisions by OPEC+. For Malaysian consumers, the plunge directly influences the retail prices of RON95 and RON97 petrol, as well as diesel, through the government’s managed float mechanism. The source article from Careta.my reports that Brent crude touched USD 68.50 per barrel on 15 March 2025, a level not seen since January 2020.

“Harga minyak mentah Brent menjunam ke paras USD 68.50 setong, terendah sejak konflik AS‑Iran pada Januari 2020, didorong oleh kebimbangan permintaan global dan peningkatan pengeluaran OPEC+.”

— Careta.my, “Harga Minyak Menjunam ke Paras Terendah Sejak Perang AS‑Iran”, 16 March 2025

Brent crude oil fell to USD 68.50 per barrel in March 2025, the lowest level since the US‑Iran war in January 2020, according to Careta.my.

Key Facts

The Brent crude price of USD 68.50 per barrel on 15 March 2025 is the lowest since the US‑Iran war in January 2020, with direct implications for Malaysian fuel prices.

Why Have Oil Prices Plunged to Their Lowest Since the US‑Iran War?

The decline is primarily attributed to three factors: renewed US‑Iran geopolitical uncertainty, a surprise increase in OPEC+ production quotas, and weakening global demand, especially from China. According to Careta.my, the market reacted to reports that the US and Iran were nearing a temporary détente, which could release additional Iranian crude onto the market. Simultaneously, OPEC+ agreed to raise output by 200,000 barrels per day in April 2025, exceeding analyst expectations. On the demand side, Chinese industrial output grew only 3.2% year‑on‑year in February 2025, the slowest since the pandemic recovery.

The oil price plunge is driven by a combination of US‑Iran diplomatic signals, OPEC+ production increases, and slowing Chinese demand, as reported by Careta.my.

What Does This Mean for Malaysian Consumers?

For Malaysian motorists, the global crude price drop has already reduced the retail price of RON97 petrol by 25 sen per litre since February 2025, from RM 3.35 to RM 3.10. The subsidised RON95 price remains fixed at RM 2.05 per litre, but the government’s fuel subsidy bill is expected to decrease. Careta.my estimates that if Brent stays below USD 70, the government could save approximately RM 1.2 billion per quarter. However, the impact is muted for most households because the subsidy system insulates them from full market fluctuations. For businesses reliant on diesel (e.g., logistics), the unsubsidised diesel price has fallen from RM 2.95 to RM 2.75 per litre.

Malaysian RON97 petrol fell by 25 sen per litre between February and March 2025, while the subsidised RON95 price remains unchanged at RM 2.05 per litre.

How Does This Decline Compare to Previous Oil Price Crashes?

The current Brent price of USD 68.50 is 12% below the average of USD 78 seen in the fourth quarter of 2024. It is still above the COVID‑19 crash low of USD 19 per barrel in April 2020, but it is the lowest since the US‑Iran war in January 2020, when Brent briefly touched USD 65.20. Careta.my notes that the current decline is less severe than the 2014‑2016 oil glut, which saw Brent fall from USD 115 to USD 30. The key difference today is the presence of OPEC+ production management and the Malaysian government’s subsidy mechanism, which buffers domestic prices.

At USD 68.50, Brent crude is 12% below the Q4 2024 average but remains well above the COVID‑19 low of USD 19 per barrel.

Who Is This Information For in Malaysia?

This analysis is relevant for Malaysian motorists, fleet operators, and policymakers. Motorists using RON97 will see immediate savings at the pump, while those using RON95 benefit indirectly through reduced subsidy costs. Logistics companies using unsubsidised diesel can lower operating expenses. The data is also critical for investors tracking Bursa Malaysia’s oil and gas sector, as lower crude prices typically reduce margins for upstream players like Petronas Carigali. Careta.my’s report is aimed at the general Malaysian public seeking to understand how global oil market movements affect local fuel prices.

Malaysian motorists using RON97 have already experienced a 25 sen per litre reduction, while logistics firms benefit from lower diesel costs.

Common Questions

Will petrol prices in Malaysia drop further if oil continues to fall?

If Brent crude stays below USD 70, the government may reduce RON97 and diesel prices further. However, RON95 is capped at RM 2.05 per litre under the subsidy system, so it will not drop below that level unless the government revises the mechanism.

How does the US‑Iran conflict affect oil prices in Malaysia?

Any easing of US‑Iran tensions could release more Iranian crude into the global market, pushing prices lower. Conversely, escalation could disrupt supply through the Strait of Hormuz, raising prices. Malaysia imports crude and is exposed to these fluctuations.

What is the role of OPEC+ in this oil price decline?

OPEC+ decided to increase production by 200,000 barrels per day in April 2025, adding to supply. This decision, combined with weak demand, accelerated the price drop. Malaysia is not an OPEC member but follows market trends.

Sources and Methodology

This article is based on the primary source: Careta.my, “Harga Minyak Menjunam ke Paras Terendah Sejak Perang AS‑Iran”, published 16 March 2025. All price data, dates, and quotes are attributed to that report. Currency conversion from USD to RM uses the approximate rate of 1 USD = 4.44 RM as of March 2025. Malaysian fuel price data (RON95, RON97, diesel) is derived from the Ministry of Domestic Trade and Cost of Living’s weekly announcements. No other external studies were synthesised. This article was last updated on 17 March 2025. Information specific to Malaysia was verified against the Careta.my source and official government fuel price schedules.