Asian countries hit by acute energy disruptions from the Gulf conflict are increasingly turning to Russia for emergency oil supplies after the United States granted a temporary sanctions waiver on Russian crude, according to the Financial Times.

Import-dependent economies across Asia have accelerated or resumed purchases of Russian oil and petrochemical products as supply strains have worsened in the wake of Iran’s takeover of the Strait of Hormuz. The Philippines and South Korea have already received Russian shipments, while Vietnam and Sri Lanka are in talks with Russian energy groups, and Thailand and Indonesia have indicated they are open to buying Russian barrels, the FT said. 

The shift underscores the severity of the energy shock confronting Asian economies, many of which rely heavily on crude and gas from the Middle East. Governments across the region have imposed conservation measures, including shorter work weeks and work-from-home directives, while expanding fuel subsidies and increasing coal use to offset disrupted natural gas supplies, the FT reported. 

Brent crude surged 63 percent in March, its largest monthly increase in decades, and traded above $118 a barrel on Tuesday, up from about $70 before the start of the Iran war. Analysts told the FT that the U.S. sanctions waiver has opened the door for buyers that previously avoided Russian cargoes to re-enter the market under pressure from soaring prices and tightening supply. 

“These are very desperate countries right now and they want to maximize the U.S. sanctions waiver,” June Goh, senior oil market analyst at Sparta Commodities in Singapore, told the news outlet. “Russia is the no-choice option.” 

India and China had already dominated purchases of Russian crude since Moscow’s full-scale invasion of Ukraine four years ago, accounting for about 85 percent of Russian crude exports, according to shipping data cited by the newspaper. But India has stepped up imports further since Washington eased restrictions, with purchases rising from 1-million barrels a day in February to 1.9-million barrels a day by the end of March, according to Kpler data cited in the report. 

In the Philippines, two tankers carrying Russian oil arrived last week, the first such deliveries since November 2021.  South Korean companies have not yet bought Russian crude, but they have purchased 27,000 tons of Russian naphtha used in plastics manufacturing. Elsewhere in the region, Vietnam’s Binh Son Refining and Petrochemical is in talks with Russian partners, while Sri Lanka’s state-run Ceylon Petroleum Corp is discussing supplies with Russian oil companies, the newspaper reported. 

Read more at the Financial Times