Asia is most vulnerable to Mideast oil supply shock: Report
Published on May 7, 2014 8:06 PM
SINGAPORE (REUTERS) - Asia's growing dependence on Middle Eastern oil has amplified the risks it faces if the Strait of Hormuz is suddenly shut, making it more vulnerable to such a disruption than other regions, UK think-tank Chatham House said on Wednesday.
Asia is more at risk than Europe and the United States to a cut in Middle Eastern supplies as it buys 75 per cent of the region's oil exports, said Chatham House energy security expert John Mitchell in a report "Asia's Oil Supply: Risks and Pragmatic Remedies".
Despite Iran's threat to shut the key Strait of Hormuz shipping route for Middle East oil in 2012, Mr Mitchell said most Asian countries have not built up sufficient reserves to cushion the impact of a disruption. A strong reliance on oil product imports in Asia has also heightened their risk, he said.
Asian countries import nearly 30 per cent of their consumption needs, mostly from refineries in South Korea, Singapore and India, which are in turn dependent on the Middle East for more than half of their crude supplies.
To continue reading, log in if you are a subscriber
If you are not a subscriber, you can get instant, unlimited access here