The European Union would prefer Southeast Asian countries to diversify their oil supply by buying oil from producers other than Russia, the EU’s foreign policy chief Kaja Kallas said on Tuesday during meetings of representatives with ASEAN countries.
Southeast Asian economies such as the Philippines, Indonesia, Malaysia, and Vietnam were the first to feel fuel shortages after the blocked Strait of Hormuz cut off most of their regular crude and fuel supply from the Middle East.
The Philippines, which sourced 98% of all its oil from the Middle East before the war, declared a national energy emergency as early as in the middle of March.
Many of the Southeast Asian countries have turned to alternative suppliers, including Russian oil, which is now allowed for unsanctioned sale by the U.S. Treasury until May 16, under a waiver the Trump Administration extended by a month earlier in April.
But the EU isn’t too happy that Russia stands to gain from the crisis in the Middle East.
Kaja Kallas, the EU’s High Representative for Foreign Affairs and Security Policy, said in Brunei today that “there is an energy crisis right now in the world. And unfortunately, this energy crisis is benefiting Russia.”
Higher revenues for Russia from oil sales mean more funds for the Kremlin to continue its war in Ukraine, Kallas said.
“We want wars to end. We want peace and then we do not have these kind of problems. So, that is why we are advocating for diversifying resources and finding them elsewhere, not from Russia,” the EU’s top diplomat said.
At the end of last month, Petron, the only refinery in the Philippines, secured almost 2.5 million barrels of Russian crude out of “extreme necessity.”
“The Corporation wishes to emphasize that the procurement of Russian crude oil is not part of the Corporation’s business-as-usual sourcing strategy, and the purchases were undertaken strictly out of extreme necessity as an extraordinary emergency measure in response to unprecedented geopolitical and supply-chain disruptions and only after exhausting all commercially and operationally viable alternatives,” Petron said.
Indonesia, Southeast Asia’s biggest economy, last week said it would import 150 million barrels of crude from Russia this year to offset part of the loss of Middle Eastern supply.
Another major economy in the ASEAN bloc, Malaysia, as well as Vietnam are also in search of Russian oil as the Strait of Hormuz has been blocked for more than eight weeks, trapping the supply that used to flow freely to Asia before the war.
By Charles Kennedy for Oilprice.com
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