The Malaysian government is preparing for a more challenging economic landscape as it drafts the 2027 Budget. Recent escalations in the Middle East, particularly involving Iran and the Houthis in attacks against United States assets and Saudi Arabia, necessitate a revised crude oil price assumption. Officials now anticipate needing to base the budget on approximately US$90 per barrel, a substantial increase from previous estimates. This adjustment reflects growing concerns about potential disruptions to global oil supplies and the overall precariousness of the regional situation. The higher price assumption will likely impact Malaysia’s fiscal planning and could influence spending priorities. The ongoing conflict adds further pressure to an already fragile global economic outlook, requiring careful consideration in the upcoming budget formulation. This means potential adjustments to government spending and revenue projections for the year 2027 in Malaysia.