Energy Ministry beefs up measures to offset crude shortage

Energy Ministry beefs up measures to offset crude shortage

Oil prices jump on Monday due to the dispute between the United States and Iran. (Photo by Thanarak Khunton)
Oil prices jump on Monday due to the dispute between the United States and Iran. (Photo by Thanarak Khunton)

Energy Minister Sontirat Sontijirawong plans to beef up preventative measures to offset a potential crude oil shortage and the recent jump in oil prices caused by the dispute between the United States and Iran last weekend.

He met ministry officials and agencies on Monday to discuss the recent tension and estimate the aftermath on the global crude oil market.

“The government will launch urgent measures once crude oil prices rise above US$80 per barrel,” said Mr Sontirat. “We have to be prepared for further consequences or incidents, but at the moment, the oil supply remains normal and prices have yet to rise sharply.”

After the tension began, the Dubai crude oil price moved up by $4 to nearly $69 per barrel.

Mr Sontirat said the government is monitoring this dispute and the ministry will evaluate the situation again on Friday to provide some preventative measures.

Earlier, the ministry planned measures fearing a supply shortage stemming from the refinery attack in Saudi Arabia last September.

PTT Plc, the national oil and gas conglomerate, reported crude oil resources imported from the Middle East were down to 50% of total imports, equal to 250 kilobarrels per day following the event in Saudi Arabia.

In the past, Thailand imported 74% of the total crude oil supply from the Middle East, totalling 420 kilobarrels per day.

PTT’s refinery facilities control 65% of the country’s capacity. It has shifted to imports from West Africa and the US instead.

These fuel shipments avoid passing through the Strait of Hormuz, a risky geopolitical area, according to a PTT report.

Mr Sontirat said the government plans to increase the country’s crude oil supply by 13% to 160 from 130 kilobarrels per day in case of a global oil supply shortage.

The rise in local crude oil production will complete within a week, according to the Mineral Fuels Department.

The ministry reported the country’s legal commercial oil reserves remained at 50 days based on oil consumption of 2.988 billion litres as of Jan 5.

The crude oil reserves in shipment process were at 1.114 billion litres and refined oil reserves for the country totalled 1.468 billion litres.

Cooking gas as of Sunday stood at 101,000 tonnes, equals to 17 days of gas consumption.

The Fuel Oil Fund oversees a levy collection from motorists. Mr Sontirat said the fund is ready to implement urgent measures to prevent a hike in local retail oil prices.

The fund has cash on hand at 37.38 billion baht to be used for price fluctuations, he said.

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