Thai energy officials and oil traders are buying more crude oil from outside the Middle East this week, as fighting near the Red Sea and the Strait of Hormuz continues to disrupt two of the busiest routes for global oil shipments, according to the Energy Ministry. The shift comes after Yemen’s Houthi forces stepped up attacks on tankers in the Red Sea and a temporary ceasefire between the United States and Iran broke down, pushing several shipping companies to reroute or delay cargo through the Gulf.
Before the current wave of fighting, roughly 58% of Thailand’s crude imports came mainly from Saudi Arabia and the United Arab Emirates, with the remaining 42% sourced from the United States and other parts of the Asia Pacific region. That split has been shifting for months as Thai refiners work to reduce their reliance on the Gulf. Thailand’s largest refiner, Thai Oil, said earlier this year it had already raised its share of crude bought from Africa to close to 40% of its total purchases, up from almost nothing before the conflict escalated, while shipments from the Americas made up close to a fifth of its supply.
As of July 23, Thailand held combined commercial and legal oil reserves, along with stock in transit and confirmed for shipment, equal to about 108 days of consumption. The country uses close to one million barrels of crude a day, with 92% of that imported and the remainder produced domestically.
Deputy energy permanent secretary Veerapat Kiatfuengfoo said Thailand has increased purchases from the United States and Argentina to help offset any shortfall from the Gulf. Talks to buy Russian crude remain uncertain because of international sanctions tied to the war in Ukraine. Refiners and traders have also activated contingency plans that include buying crude already loaded onto ships before the latest round of attacks, and officials say cargoes could eventually be rerouted around the Cape of Good Hope if conditions in the Red Sea worsen further.
The disruptions trace back to a broader conflict that has run since late February, when a US and Israeli military campaign against Iran led Tehran to restrict shipping through the Strait of Hormuz, a passage that normally carries a large share of the world’s seaborne oil. A 60 day ceasefire between Washington and Tehran collapsed in recent weeks, and Houthi forces separately declared a blockade against Saudi Arabia, striking tankers near the Red Sea’s southern entrance. Traffic through Hormuz has remained well below prewar levels through the disruption.
Oil prices have swung sharply as a result. Benchmark crude climbed more than 20% so far this month as the fighting spread from the Gulf to the Red Sea, though prices eased toward the end of last week after the US paused new strikes on Iran and Tehran signaled it had also stopped retaliatory attacks. Analysts caution that the pause remains fragile given the risk of renewed fighting on multiple fronts.
Thailand’s petroleum refining industry group has said its members have spent recent months increasing floating storage and locking in crude purchases ahead of time specifically to prepare for a prolonged Gulf crisis, which has allowed refiners to draw on a wider range of suppliers as conditions shift. The government has leaned on its Oil Fund to help keep domestic diesel and other fuel prices stable through the volatility.
For now, Thai officials describe the country’s supply position as manageable rather than urgent, pointing to reserve levels well above the 90 day threshold they consider a safety margin. But with both the Hormuz and Red Sea routes still contested and no lasting ceasefire in place, energy officials say the push to diversify away from Gulf suppliers is likely to continue.
