Hormuz Shockwave and Asia, Thailand Turns to Russian Oil

A senior official from Thailand stated on Tuesday that as Southeast Asia experiences the global oil supply shock caused by the closure of the Strait of Hormuz for the first time, Thailand has held talks with Russia regarding potential purchases of Russian crude oil.

According to reports, Thai Deputy Prime Minister Pipat Ratchakitprakarn stated that Thailand has discussed options for purchasing Russian crude oil, and negotiations are ongoing.

Last week, the United States issued a 30-day exemption allowing global buyers to purchase Russian oil loaded on tankers without being affected.

At the onset of the Middle Eastern war, Thailand banned fuel exports starting March 1 (with exceptions for Laos and Cambodia) to ensure domestic market supply.

Southeast Asian countries are more vulnerable to supply shocks from the Middle East than other regions, as most of their oil comes from the Gulf region. Financially, these countries are also highly susceptible to price shocks, as they have little reserves to continue to restrict or subsidize fuel prices when international benchmark oil prices exceed $100 per barrel.

Thai Foreign Minister Don Pramudwinai told the Thai media outlet The Nation on Tuesday that Russia is ready to sell oil to Thailand.

The minister added that Thailand has also reached out to other potential oil suppliers, including Brazil, Nigeria, and Kazakhstan.

Thai Energy Minister Uttapol Rerkpiboon stated that the country has received nearly 2 million barrels of crude oil from Angola in West Africa and over 600,000 barrels from the United States. Rerkpiboon indicated that supplies remain sufficient and urged the public not to stockpile fuel before the Songkran Festival in mid-April.

The director of the Energy Business Bureau, Sarawut Kewthip, stated that the country has enough reserves to last at least 101 days.

In addition to banning fuel exports, Thailand is also encouraging remote work, like many other Southeast Asian countries, to reduce consumption. However, the impact on industry has already begun to show, as major chemical producer SCG halted production at its Rayong olefins plant last week due to the depletion of raw materials such as naphtha.