Thailand Diversifies Oil Imports Amid Escalating Conflict in Middle East
Thailand is preparing to import more crude oil from outside the Middle East due to escalating conflicts in the region, disrupting two key shipping routes. The conflict has forced traders to diversify supply routes, with an executive at an oil company stating that the global energy outlook is tightening again and may prove more severe than earlier conflicts.
Before the war, Thailand relied heavily on the Middle East for crude oil, with 58% of imports coming mainly from the United Arab Emirates and Saudi Arabia. However, recent attacks on shipping in the Red Sea and the collapse of a temporary ceasefire between the US and Iran have led to increased demand for oil from Africa, the US, and Southeast Asia.
The crude oil premium has surged more than 400%, reflecting either the quality of the oil or risk of supply disruption. Thailand has increased imports from the US and Argentina, with deputy energy permanent secretary Veerapat Kiatfuengfoo stating that plans to purchase Russian crude remain uncertain due to international sanctions.
Thailand holds combined reserves of 2.353 billion litres of commercial oil, enough to meet demand for 108 days, but this may not be sufficient if the conflict worsens and shipments are rerouted via the Cape of Good Hope, which would add about 30 days to transport time and significantly raise costs.