Reeling From the Iran War’s Oil Shock and ‘Running Out of Ideas’ | World News

Written Sui-Lee Wee, Jason Gutierrez, Muktita Suhartono, Kittiphum Sringammuang and Tung NgoLike its neighbors, the shrimp boat “Lucky Blessings” has been docked all month at a pier in central Thailand. Wittaya Lekdee, the owner, cannot take it out to sea because he can no longer afford boat fuel, the price of which has spiked 75%.“It’s the worst that it has ever been,” he said of his plight.Two days later, about 100 miles away near Thailand’s largest deep-sea port, Laem Chabang, a truck driver sat a convoy of parked trucks, part of a protest about rising gas prices. The driver, Prayoon Srisawat, said his income had halved in recent days.
In the Philippines, 48-year-old Richard Arcana has fished his whole life. But now he is looking for another job.
The oil shock from the war in Iran has rippled through much of Southeast Asia, upending lives, straining local economies and increasing public discontent. While many countries are contending with the fallout, experts say this region of more than 600 million has been one of the hardest hit.
“It’s a crisis abroad,” said Suchart Kendang, the head of the a coastal fishermen group in Samut Sakhon province in Thailand. “But we are the ones who get screwed.”Story continues below this ad
In the Philippines, the government is handing out the equivalent of $84 each for tens of thousands of motorized tricycle and jeepney drivers around Manila. In landlocked Laos, which buys fuel from now oil-strapped Thailand, over 40% of the gas stations have been forced to close because they ran out fuel. Similarly, in Cambodia, which imports fuel from Thailand and Vietnam, nearly one-third of the country’s gas stations have closed.
In Vietnam, the government has strongly encouraged nonessential office workers to work from home. Thailand’s premier is wearing short-sleeved shirts and exhorting his fellow civil servants to do the same because air conditioners in government offices are now set at a minimum of about 79 degrees. Public servants there and the Philippines have been told to take the stairs instead of elevators. In Laos, the government has told schools that they have to reduce in-person teaching to three days from five.
Unlike the United States or Europe, Southeast Asia is heavily dependent on oil that sails through the Strait of Hormuz. Nearly 80% of the region’s crude oil imports come from the Persian Gulf, and about one-fourth of its liquefied natural gas imports have to pass through the now-blocked strait, said Sam Reynolds, an analyst at the Institute for Energy Economics and Financial Analysis.
Many of these countries have precariously low oil reserves, unlike their richer neighbors such as Japan and South Korea, both of which have built up stock that can last more than 200 days. Indonesia and Vietnam hold only about 20 to 23 days of supply; Myanmar has 40 days worth; and until recently, Thailand had enough for 60 days.Story continues below this ad
With no long-term plan in place, these governments are scrambling.
In Vietnam, the government has tapped into a state-managed fund, with kerosene costing 84% more since the war started. In Thailand, the authorities imposed a 15-day cap on diesel prices and told gas companies to increase their fuel reserves to 3% of annual trade volume, from 1%. But that spurred panic buying and lines of drivers carrying jerrycans. Several temples said they are struggling to cremate bodies because of a shortage of fuel.
On Tuesday, Thailand said it had signed new oil contracts with Angola and the United States. But it also said it had to let gas prices rise because it can no longer borrow billions of baht more from the government oil fund.
“I’m not happy and am running out of ideas,” Phipat Ratchakitprakarn, Thailand’s deputy prime miner, told reporters Wednesday.Story continues below this ad
“The government is incompetent and mismanaging the situation,” said Thongyu Khongkhun, chair of the Land Transport Federation of Thailand, which has 400,000 members. He spoke before leading a convoy of dozens of truckers who parked their vehicles alongside a road leading to the Laem Chabang sea port on Wednesday.
For now, it is the poor who are suffering.
In Wawa, a fishing community south of Manila, Linita Buenaventura, 52, said her husband had to abandon the family’s boat to find a job in another town because of high gas prices. She temporarily lives with a friend because they can no longer afford to pay rent for their small hut.
“We were proud fishermen who owned our own boats. Now we are reduced to begging for jobs,” she said. “It really is a hard life.”
For Myanmar, where the economy was upended a coup five years ago, the oil shock is a fresh blow. This month, the junta mandated an alternate day driving system for private vehicles to save fuel.Story continues below this ad
In Yangon, Myanmar’s biggest city, Tin Hlaing Moe said she was fined 30,000 kyats, about $7.50, because she was forced to flout the law as she transported her mother, who had a heart attack, to the hospital earlier this week.
“The real suffering is for people like us, the lower and middle class,” she said.
The higher prices have cascaded down to some of Thailand’s biggest export industries — seafood, agriculture and pet food — and Vietnam’s coffee sector.
Phannaphat Totup, the general manager of Thailand-based Bluefalo Petcare, said her company is grappling with a jump in the costs of plastic pellets — which go into making pet houses and food packaging — of about 30% to 40%. Oil is a key ingredient in the production of plastic pellets.Story continues below this ad
Prices for cassava are up around 15% because of rising fertilizer costs, she said. The price for tuna has increased 10%. (The need is so dire in Thailand that the government has offered food and raw materials to Iran and other Middle East countries in exchange for cargoes of plastic pellets and fertilizer.)
“It has affected all aspects of our supply chain,” Phannaphat said, adding that the company would eventually have to pass on the costs to consumers.
In Vietnam, Cam Thi Mon, 36, the head of Ara-Tay Coffee, a cooperative in the mountainous northern province of Son La, said the cost of fertilizer has risen nearly 30% in the last two weeks. “I am very worried,” she said.
Even in the wealthy city-state of Singapore, the government has warned of higher electricity prices. About 47% of its LNG last year came from Qatar. On Wednesday, Singapore’s President Tharman Shanmugaratnam said Singaporeans must “brace ourselves for a long storm of global political instability.”Story continues below this ad
If oil prices continue to rise, Suchart, the Thai fisherman, said he will have to stop fishing, a job that he’s been doing since he was 13.
Suchart, 51, took reporters out to sea using diesel from a 1-liter plastic water bottle. The government has capped the amount of diesel he can buy to about 500 baht, or $15, which he said does not amount to even one-fifth of what he uses a day.
But there would be no catch that day. Even though it was not the height of the shrimp season, Suchart said he could usually catch krill. Not this time though.
Steering the boat around, he headed home.