Thailand has held talks with Russia to potentially buy Russian crude oil, a senior Thai official said on Tuesday, as Southeast Asia first felt the global oil supply shock from the closed Strait of Hormuz.
Thailand has discussed the option to buy Russian crude, and negotiations are underway, Thailand’s Deputy Prime Minister Phiphat Ratchakitprakarn said, as carried by Reuters.
The U.S. last week issued a 30-day waiver allowing buyers from everywhere to purchase Russian oil on tankers at sea without repercussions.
In the early hours of the war in the Middle East, Thailand banned fuel exports, except to Laos and Cambodia, as of March 1, as it sought to preserve supply for the domestic market.
Southeast Asian countries are more exposed than other geographies to supply shocks in the Middle East, as they get a large part of their oil from the Gulf region. Fiscally, these countries are also quite exposed to the price shocks as they have little reserves to continue capping or subsidizing fuel prices when international benchmarks top $100 per barrel.
Russia is ready to sell oil to Thailand, the Southeast Asian nation’s Foreign Minister, Sihasak Phuangketkeow, told Thai outlet the Nation on Tuesday.
Thailand has also contacted other potential oil suppliers, including Brazil, Nigeria, and Kazakhstan, the minister added.
Thailand’s Energy Minister Auttapol Rerkpiboon said the country has secured almost 2 million barrels of crude from Angola in West Africa and over 600,000 barrels of crude from the United States. Rerkpiboon said supplies remain sufficient and urged the public not to hoard fuel ahead of the Thai New Year’s holiday, Songkran, in mid-April.
Sarawut Kaewtathip, director-general of the Department of Energy Business, said the country has enough reserves for at least 101 days.
Apart from a fuel export ban, Thailand is looking to reduce consumption by encouraging work from home, as many other Southeast Asian nations have been doing. The impact on the industry, however, is already evident, as major chemicals producer SCG last week halted output at its olefins plant in Rayong after running out of feedstock such as naphtha.
By Tsvetana Paraskova for Oilprice.com
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