How the Iran conflict is reshaping how Malaysians spend

Malaysians are closely watching the ongoing Iran conflict, but not just as a geopolitical issue. Instead, they are increasingly interpreting it as a direct threat to their everyday cost of living.

According to a new study by GrowthOps titled "Iran War Impact On Fuel Sentiment", 93.6% of respondents said they have been following developments at least somewhat closely, with more than half (56.8%) expecting petrol prices in Malaysia to rise if the conflict continues.

A further 35.6% believe prices may remain stable in the short term, but only due to increased government subsidies, highlighting a growing awareness of Malaysia’s regulated fuel pricing system.

However, the bigger concern goes beyond fuel. Rather than viewing the situation purely through the lens of petrol costs, Malaysians are increasingly framing it as a broader affordability issue. Respondents repeatedly linked rising oil prices to inflation, transport costs, groceries, and essential household spending, painting a picture of the Malaysian consumer mindset.

As one respondent put it, fuel price increases are likely to trigger a “domino effect” across daily expenses, from commuting to food purchases.

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The state of consumer behaviour

This growing anxiety is already shaping behaviour. If prices rise, only 8.8% of Malaysians say their spending or travel habits would remain unchanged. The majority expect to adopt a more cautious approach, with 34.4% saying they would manage their spending more carefully, while 20.8% would cut back on non-essential purchases.

Notably, the most immediate behavioural shift is expected to be reduced mobility. Some 46% of respondents say they would drive less or make fewer trips, making it the strongest response across all categories.

In contrast, brand loyalty at the petrol pump appears relatively resilient. About 28.8% say they would continue using their usual petrol brand, while 24.8% say rising costs would not affect their brand choice at all. Instead, consumers are more willing to compromise elsewhere.

Car maintenance, for instance, is more vulnerable. Some 40.8% say they would look for more affordable servicing options, while 18% would delay maintenance altogether, suggesting that cost pressures are more likely to impact upkeep behaviours than fuel brand preferences.

The study also highlighted generational nuances. Gen Z consumers emerged as both highly engaged and more open to switching brands, particularly when influenced by quality, trust, and rewards-based incentives.

What this means for brands

Overall, the findings point to a consumer base that is not waiting for economic certainty before reacting. As Chris Greenough, general manager, GrowthOps Malaysia explained, Malaysians are already preparing for the potential fallout.

“The Malaysian consumer is not waiting for a perfect economic signal. They are already mentally preparing. What we are seeing is a consumer who understands fuel price pressure as a wider household issue," he said. "This is no longer just about what happens at the pump. It is about how people expect global instability to affect everyday living."

For brands, this presents a critical inflection point. According to GrowthOps, similar data from the pandemic showed that brands which switch off marketing during periods of uncertainty, have to rebuild consumer's mental availability again when recovery comes.

Rather than pulling back during periods of uncertainty, the data suggests that brands need to remain present, but more importantly, relevant. Consumers are increasingly looking for messaging, products, and value propositions that acknowledge real-world financial pressures.

The findings come as global markets continue to watch the impact of Middle East tensions on oil supply routes and prices. For Malaysian businesses and brands, the study points to how consumers are alert, cautious, and increasingly likely to make practical trade-offs if uncertainty continues.

Earlier this year, insights from Criteo revealed that shoppers across Southeast Asia are taking longer than ever to complete purchases during Ramadan, with some journeys stretching beyond 50 days.

The global commerce platform found that for purchases made in the final two weeks of Ramadan 2025, the average time between a shopper’s first product visit and completed purchase was 19 days. The shift signals that brands need to influence consumers earlier in the decision-making process, particularly as Chinese New Year and Ramadan are set to fall in the same week in 2026.

Retail sales across the SEA region also rose 13% year-on-year during Ramadan 2025, highlighting the growing commercial importance of the holy month. Shopping is no longer confined to the final days before Eid. While consumers begin researching products weeks in advance, conversion remains concentrated closer to the peak festive period.

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