Last week (20 April – 26 April 2026) was a watershed moment for the global economy, dominated by the escalating economic and inflationary fallout of the Middle East conflict. The narrative shifted from “resilient growth” to “crisis management” as supply chains and energy prices hit critical levels.
Last Week By Continent
- Asia: Refinery Runs Slashed Amid Feedstock Scarcity. Major Asian hubs, including Singapore and South Korea, saw refinery runs cut by nearly 6 million barrels per day as Middle Eastern supplies remained constrained. China added 40 million barrels to its emergency reserves, signaling a pivot toward a long-term energy defense strategy.
- Europe: Energy Vulnerability & Fiscal Stress. Germany and France faced deepening stagflation risks as higher energy costs collided with existing budget deficits. While Spain and the Netherlands showed relative resilience, the Eurozone as a whole entered a “high-alert” phase for energy-driven industrial contraction.
- North America: The US “Safe Haven” Dollar & Debt Dilemma. The US Dollar strengthened significantly as investors fled to safety. However, Treasury yields spiked as the market priced in increased deficit spending for defense and the potential for “sticky” inflation, delaying long-awaited Fed rate cuts.
- Africa: Fertiliser & Food Security Crisis. Low-income nations across the continent faced a severe blow. The reliance on imported gas (for fertiliser) and oil caused a spike in agricultural production costs, threatening a renewed food security crisis just as many economies were beginning to stabilize.
Last Week By Key Countries
- Malaysia: Ringgit Resilience Amid CPO Upside. The Ringgit closed the week around 3.95–3.96 against the USD, buoyed by high Crude Palm Oil (CPO) prices (averaging RM4,200/tonne). Domestic focus remained on e-Invoicing compliance and major infrastructure positioning ahead of the Labour Day lull.
- China: Industrial Stabilization vs. Trade Friction. China showed signs of export-led stabilization, but faced rising tensions with the EU over industrial “overcapacity” in EVs and semiconductors.
- India: The Rupee Under Pressure. Despite robust domestic demand, India’s heavy dependence on imported energy led to a sharp depreciation of the Rupee and a cooling of its red-hot equity markets.
- Japan: Yen Watch & Monetary Bind. Japan faced a resurgence of inflation. The Bank of Japan (BoJ) remained under immense pressure to defend the Yen without triggering a domestic debt crisis.
Last Week By Bloc
- ASEAN: The “QR Settlement” & Regional Integration. ASEAN leaders pushed forward with the “ASEAN QR” initiative for cross-border digital payments to buffer against FX volatility. However, the region remains hyper-sensitive to the Middle East conflict’s impact on petrochemical and aviation feedstocks.
- NATO / EU: The Defense Spending Boom. Geopolitical tensions prompted a massive scaling up of defense spending across the bloc. A new IMF study released last week warned that while this boosts activity in the short term, it risks “crowding out” social spending and worsening medium-term fiscal sustainability.
- OPEC+: Production Tightrope. OPEC+ maintained its supply discipline, but infrastructure damage and feedstock supply disruptions in member nations (like Iran) have effectively tightened the market beyond planned quotas.
Last Week Commodities
- Energy (Brent Crude): The Physical-Futures Disconnect. Physical crude prices surged toward $150/bbl, significantly outpacing futures markets as refiners scrambled to replace Middle Eastern cargoes. Middle distillate (diesel/jet fuel) cracks in Singapore hit all-time highs.
- Agriculture (CPO): Biofuel Economics Re-Ignited. The “palm-gas oil” (POGO) spread narrowed significantly. Firmer Brent crude has made Indonesia’s potential B50 biodiesel mandate more economically viable, providing a strong price floor for Malaysian planters.
- Critical Minerals: The Scarcity Alliances. Governments began formalizing “Critical Mineral Alliances” to bypass China-dominated supply chains, treating rare earth elements as a top national security risk.
Strategic Bottom Line
We are in a “Geopolitics of Scarcity” phase. For the coming week, Malaysian firms should focus on energy hedging and supply chain diversification. The strength of the Ringgit provides a temporary buffer, but the volatility in global energy suggests that inflation may remain higher for longer, necessitating a “Wait-and-See” approach for large capital expenditures.