Asian nations pivot to Russian oil as Middle East conflict chokes energy supply

Asian countries are confronting deepening energy crises triggered by the conflict between the US and Iran, according to a report by the Financial Times.

In a bid to secure millions of barrels of crude, regional powers have been compelled to turn toward Russia following a temporary lifting of US sanctions. While the Philippines and South Korea have already taken delivery of Russian oil and petrochemical shipments, Vietnam and Sri Lanka are reportedly continuing high-level negotiations to secure supplies.

Thailand and Indonesia, both of which previously relied heavily on Middle Eastern imports, have also confirmed their readiness to begin procurement.

Jun Go, senior oil market analyst at Sparta Commodities, characterized the shift as a move born of necessity. “At this moment, these countries are in a desperate situation and intend to maximize the window provided by the suspension of US sanctions,” Go stated. “Russia is the only option. If someone offers you oil when you are desperate, how can you say no?”

The Philippines receives first shipment in two years

Data from the analytics firm Kpler reveals that two tankers carrying Russian oil arrived in the Philippines last week, marking the first such delivery since November 2021.

Petron Corp, which operates the only oil refinery in the Philippines, announced the purchase of 2.5 million barrels of Russian crude.

Company officials described the acquisitions as an emergency measure against “unprecedented geopolitical and logistical disruptions.” The statement emphasized that the Philippines reached this decision only after exhausting all commercially and operationally viable alternatives.

Strait of Hormuz blockade severs supply chains

Following the commencement of military operations against Iran by the US and Israel on February 28, Tehran declared a halt to trade through the Strait of Hormuz. This critical waterway serves as the artery for approximately 20% of the world’s oil supply and more than 30% of global liquefied natural gas (LNG).

The conflict in the Middle East and the ensuing restrictions in the Strait of Hormuz have triggered severe supply disruptions and a sharp spike in fuel prices. Shortly after the hostilities began, Petron Corp reported that a shipment of 2 million barrels of oil had been blocked from passage due to the Iranian naval blockade.

Washington temporarily suspends sanctions

In March, the US moved to ease sanctions against Russia. The Washington administration issued a 30-day general license permitting the sale of Russian oil and petroleum products loaded onto vessels by March 12. Following this period of flexibility, which remains in effect until April 11, India has also been observed rapidly accelerating its oil purchases.

Washington has announced plans to reinstate sanctions on Russian fuel once energy market prices return to stabilized levels.

Kremlin spokesperson Dmitry Peskov noted that the rise in oil prices combined with the relaxation of US sanctions would generate additional revenue for the Russian budget.

However, Deputy Foreign Minister Andrey Rudenko stated that Moscow maintains its policy of refusing to supply oil to countries that support the implementation of a price cap.