Asian refiners craft contingency plans amid Red Sea crisis: S&

Asian refiners craft contingency plans amid Red Sea crisis: S&

New Delhi: The ongoing Red Sea crisis has prompted Asian refiners to reassess their oil policies and develop alternative plans to secure steady feedstock flows. While immediate impacts on near-term oil supplies appear limited, the situation has refiners contemplating alternative routes to ensure uninterrupted feedstock supply, potentially leading to increased insurance costs and squeezed refining margins, according to S&P Global Commodity Insights (GCI). Despite Asia's heavy reliance on imported oil, the strategic efforts of top importers to diversify their oil import baskets and expand strategic storage in recent years provide a buffer for ensuring smooth feedstock flow even in the face of crises. According to Zhuwei Wang, Asian oil analytics manager at S&P Global Commodity Insights, the Red Sea crisis affects Asian oil flows in three ways: potential hurdles for Russian crude flowing to Asia, cautiousness among exporters of products moving north-bound from Asia to Europe, and longer routes leading to incremental bunker demand in Asia. "First, any escalation will create hurdles for Russian crude flowing to Asia, forcing buyers to look for substitutes from other origins," Wang said. He added, "Secondly, for products moving northbound from Asia to Europe, exporters are cautiously watching developments before taking the plunge. Additionally,