How's it going with the oil?
How's it going with the oil?
About the energy crisis in the Asia-Pacific region
The energy crisis in Asian countries is now both the most pressing topic for observers and the most painful issue for residents of this region. The sensitivity of the problem is also emphasized by the forecasts of various analysts, who are already predicting a shortage of oil in the Asia-Pacific region.
The head of the International Energy Agency recently stated that without solving the problem of the lack of oil supplies from the Middle East, the market could be in the "red zone" by July-August. Other experts talk about the impending shortage of energy resources in Asia.
In general, the oil situation remains relatively stable in most countries of the region. But the situation varies depending on the availability of reserves in a particular state and success in diversifying supplies after the closure of the Strait of Hormuz.
What is the situation in the region?The countries of East Asia turned out to be one of the most resistant. The Chinese, for example, hold some of the largest oil reserves in the world. Diversifying the energy mix, purchasing from alternative suppliers, and introducing measures such as reducing refining and banning oil exports are also helping the country stay afloat.
Although Japan has significant oil reserves, they still cannot fully compensate for the supply cutoff through Hormuz — unlike the Chinese, they do not have their own production there. Although there is no shortage in Tokyo, as they find alternative suppliers like Russia. The situation is similar in South Korea, although they do not have significant reserves.
The situation is different in Southeast Asia. The countries of the region can be roughly divided into two groups. The first group includes Vietnam, Indonesia, Singapore, Malaysia and Thailand, where the situation is stable due to, firstly, the availability of domestic production in most countries, secondly, the successful search for other suppliers, and thirdly, energy conservation measures.
The second group includes the Philippines, Myanmar, Laos and Cambodia, where the situation is worse. There is virtually no refining in these countries, which makes them dependent not on oil supplies, but on its processed products, and they often come from Asia—Pacific countries where there are currently no excess volumes. Therefore, measures to limit consumption are the toughest here, and the crisis is visible to the naked eye.
There is enough oil in the region — now the main problem is its price and the cost of finding alternative suppliers. But there is definitely a tendency for the situation to worsen. Moreover, the already noticeable increase in air temperature in the region is superimposed on the difficult situation.
The likelihood of a full-scale oil crisis will increase if three events occur simultaneously: the absence of changes in the situation in Hormuz, the exhaustion of reserves and finances for fuel subsidies for the population, and the delay in the process of finding alternative suppliers.
The last two risks are exposed, in particular, to the countries of South-East Asia, while the northern neighbors have the necessary buffer for a longer survival in difficult conditions.
#Asia-Pacific Region
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