On 2/3, PVGas Trading, a subsidiary of Petrovietnam Gas Corporation, announced a force majeure event potentially affecting liquefied petroleum gas (LPG) supplies to customers in the southern region.
The primary cause is an international supplier declaring force majeure following the collapse of a loading bridge at Saudi Aramco's NGL Juaymah facility on 23/2, disrupting propane and butane shipments. Consequently, all LPG shipments scheduled for delivery to Thi Vai and Diem Dien terminals from 10/3 have been suspended.
Additionally, armed conflicts in the Middle East have disrupted LPG tanker routes through the Strait of Hormuz. As of the afternoon of 2/3, at least two very large crude carriers (VLCCs) were hit by missiles, and multiple natural gas liquids (NGL) and LPG production facilities were attacked, causing severe damage.
Due to safety risks, very large gas carriers (VLGCs) transporting LPG from the Middle East currently have no delivery plans for PVGas Trading from late March through April.
"Given this situation, the company is forced to reduce its import delivery schedule until 10/3 and cannot arrange supplies after that date", PVGas Trading stated.
To mitigate this, the company is working with partners to find and arrange alternative supplies quickly, at the most reasonable possible cost. However, the company also acknowledged that supplies in the East Asian market are scarce, with Thailand having activated emergency measures and temporarily halted oil product exports.
The company also urged customers to proactively balance their production and business plans and agree on feasible solutions for the future. They will continue to update the situation and commit to cooperating with customers to overcome this period.
On 28/2, the United States and Israel attacked Iran, killing Iranian Supreme Leader Ali Khamenei. Iran swiftly launched retaliation operations targeting Israeli territory and numerous US bases in Middle Eastern countries. Currently, Qatar has halted liquefied natural gas production, Israel has temporarily closed its gas fields, and Saudi Arabia has shut down its largest oil refinery due to the conflict.
Furthermore, according to Tran Hoang Son, Market Strategy Director at VPBank Research, the closure of the Strait of Hormuz could significantly impact energy supply and prices. This is the world's most vital oil transit route, with approximately 20-22% of the global oil supply (equivalent to 20-21 million barrels per day) passing through it. Additionally, a significant volume of liquefied natural gas from Saudi Arabia, Iraq, UAE, Kuwait, Qatar, and Iran also relies on this maritime route.
VPBankS estimates supply could be suddenly impacted if restrictions persist, even for a few days, which could cause oil prices to surge. Global retail fuel prices, including in Vietnam, would rise accordingly, leading to inflation and economic pressure.
Phuong Dung
