Who Will Run Out of Oil First? These Asian Countries May Not Last More Than 40 Days……

Caixin, March 17 — (Editor: Xiao Xiang) Despite reports on Monday that some oil tankers are passing through the Strait of Hormuz, the trend over the past two weeks clearly shows that the estimated oil flow through the strait continues to decline rapidly.

Bank of France estimates that current oil flow through the Strait of Hormuz is about 500,000 barrels per day, which means a reduction of approximately 19.5 million barrels per day compared to the average flow in the past. Even considering rerouted transportation via regional pipelines, about 17 million barrels of oil per day remain unable to be transported normally.

Meanwhile, the scale of oil production shutdowns in Middle Eastern oil-producing countries is also rapidly expanding, now approaching 7 million barrels per day, and may surpass 10 million barrels per day within a few days. In refined oil products, due to export restrictions and limited pipeline rerouting options, nearly 2 million barrels per day of refining capacity in the Gulf region has been shut down due to supply bottlenecks. Coupled with infrastructure attacks, this has led to a tightening of global refined oil supply and demand balance, triggering soaring prices.

Against this background, a key issue is becoming increasingly apparent: which countries will be the first to hit the “oil wall”?

The commodity research team at Bank of France believes that, thanks to the continued depletion of refined oil inventories, Europe remains relatively unaffected for now.

The region’s commercial and strategic tanks hold nearly 70 million barrels of jet fuel, enough to offset up to 300,000 barrels per day of Gulf supply shortages for several months, easing initial shocks. However, given the Gulf region’s role as a major supplier to Europe, Africa, and Asia, the supply pressure on middle distillates (especially diesel and jet fuel) is rapidly intensifying.

The naphtha market, critical to Northeast Asian petrochemical industries, is also tightening, while reduced LPG shipments from the UAE and Qatar have pushed the propane market higher. As a result, the entire supply system is being forced to rebalance supply and demand by raising refined oil prices.

The key question now is how long major importers can sustain their fuel systems before more severe supply shortages occur. Although countries are mobilizing strategic reserves, commercial inventories, and crude oil in floating storage facilities, there are significant differences in their levels of security.

Are Southeast Asian countries the most vulnerable?

Bank of France points out that Asian economies may face even more severe problems, as the region’s oil imports through the Strait of Hormuz exceed 13 million barrels per day—about 50% of total regional imports—with China, India, South Korea, and Japan being the four largest buyers.

In terms of proportion, Japan and South Korea are most affected by the Strait of Hormuz, with 81% and 62% of their oil historically coming from this strait.

Among these four major buyers, China’s energy security is relatively better protected. According to Bank of France estimates, even if the Strait of Hormuz is blocked, China’s large oil reserves could buffer supply disruptions for nearly 300 days.

In terms of reserve days, India and South Korea are the most vulnerable, with their oil stocks only able to buffer risks from the Strait of Hormuz for 74 and 73 days, respectively.

Furthermore, looking at other Asian countries affected by the Strait of Hormuz, including the Philippines, Myanmar, and Vietnam, their buffer capacities are even more limited—supporting only 20-40 days.

For other parts of Asia outside these “Big Four,” about 70% of their oil imports come from the Strait of Hormuz, and their reserve days are much weaker than those of the main four buyers.

In terms of stock barrels, the entire Southeast Asian region’s reserves are highly uneven. Some areas hold substantial crude oil reserves but almost no refined product inventories. A common point is that nearly all these countries have very tight reserve days.

From the perspective of import barrels, Singapore is most affected by the Strait of Hormuz, relying on about 680,000 barrels of oil daily from the region. While Brunei’s crude oil reserves are sufficient, its refined product inventories are very limited.

Currently, many Asian governments are exploring or implementing emergency measures to stabilize domestic fuel markets.

Some responses are mainly preventive, such as restricting exports or utilizing strategic reserves. Others are more aggressive—indicating tighter physical supplies—including demand suppression policies, targeted subsidies, or rationing in some cases.

Due to disruptions and rising prices caused by the Iran conflict, Vietnam’s Ministry of Trade issued a statement on March 10 urging local businesses to encourage employees to work from home to save fuel. The Vietnamese government also decided to cancel fuel import tariffs until the end of April.

Thailand announced on the 4th of this month that it would freeze diesel and gasoline prices immediately. To maintain low domestic diesel prices, the Thai government is using fuel funds for substantial subsidies.

The Philippine President Marcos recently stated that authorities are preparing measures to mitigate the impact of rising fuel prices, including reducing fuel excise taxes, providing fuel subsidies, and instructing some government departments to adopt a four-day workweek.

The escalating energy crisis has once again hindered many Southeast Asian countries’ ambitions to develop supply chain hubs. In recent years, these countries have actively attracted multinational investments to build regional manufacturing centers. However, after encountering the “oil wall,” addressing strategic reserve gaps and improving energy and power infrastructure may become more critical than investment attraction in the coming years.