Reuters – Asian countries including Vietnam, Thailand, the Philippines, Indonesia, and Sri Lanka are preparing to purchase Russian oil as the ongoing war in Iran disrupts supplies, raising concerns that demand may exceed supply, according to multiple sources, including Russia.
Since the onset of the conflict in Ukraine, European customers—previously the largest buyers of Russian oil and gas—have largely distanced themselves from Moscow. Consequently, India and China have come to account for approximately 80% of Russian oil exports, with Turkey also emerging as a significant buyer.
However, in recent weeks, a growing number of Asian countries have expressed interest in Russian oil, as reported by various sources, including media outlets and Russian officials. “Demand is high, particularly for alternative destinations. As a result, a point may come when it becomes difficult to meet additional demand,” Kremlin spokesman Dmitry Peskov stated in response to inquiries regarding Russian oil demand.
A fifth of global oil production has effectively been obstructed from reaching the market due to the U.S.-Israeli war on Iran, which has halted maritime traffic through the Strait of Hormuz.
Russia has benefited from elevated oil prices and a 30-day sanctions waiver from the United States for purchases of Russian oil at sea. Oil revenues and natural gas sales contribute to approximately a quarter of the country’s state funds.
However, Russia’s capacity to increase oil exports is limited, in part due to Ukrainian drone attacks that have severely impacted at least 40% of the nation’s oil-exporting capabilities.
TWO TANKERS FOR MANILA
The Philippines has acquired two cargoes of Russia’s far-eastern ESPO Blend, totaling around 1.5 million barrels, marking its first Russian oil purchases in five years, according to LSEG data.
The Sara Sky and Tiger Wings tankers delivered oil to the country’s Limay port, home to the terminal for the Bataan refinery.
Thailand has also engaged in discussions with Russia regarding potential crude oil purchases, as noted by Deputy Premier Phiphat Ratchakitprakarn.
Several media outlets in Sri Lanka have reported on negotiations concerning Russian oil supplies to the country.
Additionally, Vietnam’s Prime Minister Pham Minh Chinh visited Moscow this week, requesting that the Russian oil and gas company Zarubezhneft increase its investment in Vietnam and supply crude oil to the Southeast Asian nation on a long-term basis.
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