Signs of Jet Fuel Hoarding Emerge in Asia After Iran Oil Shock

Article content(Bloomberg) — Signs are growing that Asian countries are hoarding jet fuel after the Iran war sent oil prices surging, reflecting growing strain on the aviation industry.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentSouth Korean carriers got notified about refueling restrictions from some countries and the government is discussing whether to redirect export-bound jet fuel to the local market, the nation’s transport ministry said in a statement to Bloomberg on Wednesday.

Philippine Airlines Inc.’s president said in an interview that the Southeast Asian nation may soon resort to fuel rationing. In Vietnam, the aviation agency warned of potential jet fuel shortages from early April and is cutting flights as a result.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentDifficulties securing fuel threaten to aggravate the airline industry’s woes as the Iran war rages on and keeps oil prices high. Though countries have largely been able to avoid running out of fuel, Asia is the most vulnerable region for shortages if the Strait of Hormuz stays effectively closed. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“The surge in jet fuel prices alongside disruptions to Mideast flight routes appear to have also caused inflationary pressures on air travel,” Citigroup Inc. analysts led by Anthony Yuen wrote in a note. “Demand effects could adversely impact travel, posing downside risks to Asia’s more tourism-dependent economies.”Article contentThe crisis is rapidly spreading as governments pivot from market-driven exports to preservation. China and Thailand have both tightened curbs on refined fuel exports to protect their own strategic stocks, while Australia implemented a temporary 20% cut in its minimum stockholding obligations for diesel and petrol amid dwindling imports.Article contentIn Korea, the government is now stepping up contingency planning for a worst-case Middle East scenario, including exploring the possibility of releasing strategic oil reserves in line with the International Energy Agency’s proposal.

Finance Minister Koo Yun Cheol said earlier this month the country’s reserves are sufficient for about 208 days. Article contentArticle contentKorean Air Lines Co., the country’s largest flag carrier, said it is closely monitoring the situation. Its budget affiliate, Jin Air Co., said it has not received any official notice from overseas about refueling and maintains supply levels that won’t immediately disrupt operations.

Asiana Airlines Inc. was unavailable for comment. Article contentConcerns are also mounting in the Philippines, where President Ferdinand Marcos Jr. became the first Southeast Asian leader to declare a state of national energy emergency since the conflict began. He told Bloomberg Television in an interview Tuesday that the country’s carriers have been forced to transport enough fuel for a round trip, and that grounding planes is a “distinct possibility” as Manila continues supply talks with nations such as China and Russia. Article contentSeparately, the country’s transportation chief said in an interview the government can back airlines’ efforts to secure jet fuel, and can help carriers obtain guarantees that oil contracts will be honored.Article content—With assistance from Randy Thanthong-Knight.Article contentTrending JPMorgan sees 'national security risk' in old grid networks PMN Business Posthaste: Canada's troubled housing market just got hit with another headwind News Despite growing financial pressures, Canadians are still reliably paying their mortgages Mortgages Smith calls for new southbound pipelines, says U.S. could call 'first dibs' on Canadian oil exports Oil & Gas Oil and gas supply chain is about to snap, warns energy economist Peter Tertzakian Oil & Gas Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. JPMorgan sees 'national security risk' in old grid networks PMN Business Posthaste: Canada's troubled housing market just got hit with another headwind News Despite growing financial pressures, Canadians are still reliably paying their mortgages Mortgages Smith calls for new southbound pipelines, says U.S. could call 'first dibs' on Canadian oil exports Oil & Gas Oil and gas supply chain is about to snap, warns energy economist Peter Tertzakian Oil & Gas