Malaysia is looking to diversify its crude sourcing with supply from the U.S., South America, and Africa as the Hormuz crisis has choked off its key Middle Eastern deliveries, Malaysian Economy Minister Akmal Nasrullah Mohd Nasir said on Wednesday.
The Asian economies were the first to be hit by the lack of supply from the Strait of Hormuz as the region depended on Middle Eastern crude, naphtha, and fuel supply for most of its demand.
Countries have scrambled for alternative supply over the past nearly three months and have launched fuel-saving measures including work-from-home options and even rationing.
Still, Malaysia’s fuel supply looks stable enough and the country currently doesn’t need to take drastic measures such as fuel rationing or restrictions on vehicle use, Prime Minister Anwar Ibrahim said last month.
“This is one of the countries where supply is still sufficient. There is no need for rationing, no need for queues, and no need to restrict vehicle usage,” the official said.
Malaysia has secured its fuel supply until the end of July, state energy firm Petronas has assured the economy ministry, Nasir said in May.
In remarks today, Nasir said the assurance through end-July doesn’t mean Malaysia faces difficulties.
“We have given our assurance that supplies are secured until the end of July. It does not mean we are facing a difficult situation,” the local daily New Strait Times quoted the minister as saying.
Malaysia is now looking for new supplies from Africa and the Americas, while importing fuel from Singapore, Nasir said.
However, the minister noted that the crude grades need to be suitable for refining at Malaysia’s refineries.
“It is not simply a matter of buying from anywhere, but ensuring the supply is compatible with the facilities we have,” the official noted.
Before the war, Malaysia relied a lot on crude supply from the Middle East, and on Africa, South America, and the U.S. to a much lesser extent.
By Charles Kennedy for Oilprice.com
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