Bangkok: Oil prices surged following a renewed conflict in the Middle East, leading to concerns over energy supply disruptions. Refinery groups in Thailand have confirmed that they have sufficient crude oil supply to ensure the country's energy security, despite the escalating situation after Iran announced the shutdown of the Strait of Hormuz. Oil inventories are currently higher than normal levels seen approximately 10 days prior to the potential conflict.
According to Thai News Agency, global crude oil prices surged after the US military initiated a new offensive against Iran, following the downing of a US Army helicopter. Iran's navy announced it would attack any ship passing through the Strait of Hormuz, leading to a complete closure of shipping lanes. This has raised concerns in the markets about prolonged disruptions in energy supply. July WTI crude futures rose 2.94% to $92.68 per barrel, while August Brent crude futures increased by 2.52% to $95.45 per barrel.
Ms. Rungnapa Chanchukiat, Chair of the Petroleum Refinery Industry Group of the Federation of Thai Industries (FTI), stated that the group's refineries are actively monitoring the global energy market, focusing on supply, transportation routes, and risk factors affecting oil supply. They continuously assess the situation and plan for crude oil procurement, utilizing cooperation with networks of global oil traders and producers to access various crude oil sources and adjust procurement plans promptly.
The group's adaptability stems from continuous investment in refinery development and improvements, allowing them to accommodate crude oil from diverse sources and increase supply flexibility. In response to the Middle East unrest, the refineries have increased crude oil sourcing from regions like West Africa and the United States, reducing reliance on the Middle East from approximately 60% to 30%, with deliveries still possible from ports outside the Strait of Hormuz.
To maintain energy security, the refinery group has implemented additional supply management measures, such as accelerating advance procurement of crude oil, increasing crude oil storage on ships, and acquiring additional finished oil tanks temporarily. The current oil level in the system is about 10 days higher than the pre-conflict normal, increasing confidence that Thailand can meet energy demands and mitigate risks.
The petroleum refining industry group will continue to monitor the global energy situation and manage crude oil procurement effectively, working with the Ministry of Energy and related agencies to ensure Thailand's energy resources remain sufficient under any circumstances.