Energy Ministry girds for disrupted oil supply

Energy Ministry girds for disrupted oil supply

The Energy Ministry is concerned that tensions in the Middle East will push up global oil prices and hit supplies to Thailand. (Photo by Somchai Poomlard)
The Energy Ministry is concerned that tensions in the Middle East will push up global oil prices and hit supplies to Thailand. (Photo by Somchai Poomlard)

The Energy Ministry has ordered relevant oil and gas regulators to monitor the political conflict in the Middle East to prepare for an interruption of petroleum supplies in a worst-case scenario.

Energy Minister Siri Jirapongphan said all state agencies have to prepare measures for an interruption of oil and gas supplies.

Six oil refineries in Thailand have to report their supply and selling volume as well as the quantity of crude oil and refined oil to the ministry every day, instead of every month.

"This requires close surveillance in preparation for a supply interruption," said Mr Siri.

He said oil reserves for both commercial and legal purposes normally stands at 30-45 days, and the ministry has yet to change that requirement.

The State Oil Fund has liquidity and cash of 37 billion baht, enough to prepare for possible oil price fluctuations.

Mr Siri said the country's economy depends on oil imports, so preparation is crucial to prevent any impact in the future.

Dubai crude oil on Tuesday closed at US$72 per barrel because of the conflict in that region and the US-China trade war.

The former projection for Dubai crude oil in 2019 was a range of $73-75 per barrel.

Imports of crude oil from the Middle East account for roughly 60% of Thailand's total import volume.

"If the situation worsens, energy-saving measures will be adopted for the country," said Mr Siri.

According to SET-listed Thaioil Plc, tensions in the Middle East pushed up oil prices in the past two weeks, but oil prices remain under pressure from concerns that the US-China trade war will hurt the global economy and oil demand.

Thaioil forecasts oil prices are expected to remain high because of concerns about supply disruptions in the Middle East.

US crude inventories are also likely to drop as refineries return from maintenance upgrades.

Tensions have simmered since 2018 as the US government recently sanctioned Iran to pressure it regarding Iran's nuclear programme.

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