The impact of oil price shocks on the Malaysian economy was studied using data on oil prices, GDP, revenue, expenditure, and subsidy. The research found that in the short term, oil price shocks benefit Malaysia's economy by increasing oil revenue, but this effect slows down in the long term. Oil price shocks also lead to increased GDP and total subsidy over time. Fluctuations in world oil prices have a significant short-term impact on government expenditure, showing that fiscal policy plays a key role in transmitting oil price shocks to the economy. Implementing expansionary fiscal policy during oil price shocks can help boost economic growth in the long term, as long as economic policies remain stable and consistent.