Speaking on his Game of Impossible podcast, Idris Jala said the crisis underscored the need for Malaysia to take control of its own oil and gas resources instead of leaving the sector largely in foreign hands.

He said oil prices jumped fourfold during the 1973 oil crisis, going from US$3 to US$12 per barrel, after the Organization of Arab Petroleum Exporting Countries (Opec) curbed production amid a war between Israel and a coalition of Arab states led by Egypt and Syria.

Idris said the Opec oil crisis formed the backdrop against which Razak moved in 1974 to enact the Petroleum Development Act, which saw the creation of Petronas that year.

Under the law, Petronas was vested with ownership of, and exclusive rights over, Malaysia’s petroleum resources, both onshore and offshore, giving the national oil company control over how those resources were explored and developed.

According to Idris, exploration and production in Malaysia was at the time largely carried out by foreign oil majors, including Exxon and Shell.

That was why the then prime minister concluded that Malaysia needed a national oil company to own, control, and manage the country’s petroleum resources, said Idris.

“Credit goes to Tun Razak. He saw that crisis in 1973.

“His response was measured and factual. He took the crisis that was happening there and created a game-changing strategy for Malaysia.”

Idris said Petronas had since grown into one of the most successful national oil companies, and had become a major contributor to government finances.

Idris also commended Singapore’s approach under Lee Kuan Yew, noting that despite having no oil and gas reserves, the republic’s long-time prime minister successfully turned his country into a petrochemical complex and refinery hub – “essentially the biggest oil and gas trading centre in Asean”.

He said the lesson for Malaysia today was that major crises could still be turned into long-term national advantages – provided that leaders were willing to act decisively.