Risk of high energy prices if conflict prolongs
Talking to Lao Dong Newspaper, Dr. Tran Van The - Chairman of the Board of Directors of INDEL Investment and Development Joint Stock Company (INDEL CORP) assessed that Iran is still one of the world's important oil producers, despite being sanctioned.
Iran's oil production accounts for about 3% of the total global supply - a not large proportion but has a very strong geopolitical impact. Therefore, if the situation continues, oil prices may exceed 80 USD/barrel in a short time and will have spillover effects on the global energy market" - Dr. Tran Van The said.
For consumers, Dr. Tran Van The believes that retail gasoline prices in many countries may increase when crude oil prices increase. The reason is that input material costs are higher, the impact may extend to inflation, because transportation and commodity production costs both depend on fuel. If the conflict situation develops in the short term, the oil and gas market reacts very sensitively to any new military developments, pushing prices higher due to concerns about risks.
Assessing the impact on Vietnam, Dr. Giang Chan Tay - Director of Boi Ngoc One Member Limited Liability Company (trading in gasoline and oil in Vinh Long) said that the impact is inevitable. Despite domestic production, Vietnam still has to import a significant part of crude oil and finished gasoline and oil products to serve consumption and production needs.
When world oil prices increase, import costs increase accordingly, putting direct pressure on domestic gasoline and oil prices through the management mechanism. This not only affects consumers but also deeply impacts the entire economy. Gasoline and oil are essential inputs for most manufacturing and transportation industries. When fuel prices increase, logistics costs will increase accordingly, thereby pushing product costs up" - Dr. Giang Chan Tay emphasized.
Proactively stockpile to reduce shock
The Middle East conflict may continue and contain many unpredictable developments. However, if Vietnam proactively builds an effective reserve strategy, accelerates the diversification of energy sources and manages policies flexibly, it can completely control external shocks well.
According to Assoc. Prof. Dr. Nguyen Thuong Lang - an economic expert, in the scenario of strong oil price increases, Vietnam needs to pay special attention to the reserve strategy. If proactively buying when prices are still in a low or stable zone, the economy can significantly reduce cost shock when the market enters a hot growth phase. Conversely, if delayed, import costs will increase very quickly, narrowing the space to manage domestic prices and putting great pressure on macroeconomic stability.
Building forecast scenarios with bad assumptions about oil prices and strategic commodities is necessary. Preparing in advance helps regulators not fall into a passive position when the market fluctuates strongly, while creating a basis for policies on reserves, supply regulation and social psychological stability" - Assoc. Prof. Dr. Nguyen Thuong Lang emphasized.
If the war lasts, Dr. Giang Chan Tay believes that Vietnam needs to proactively seek and diversify import sources instead of dependence on certain areas.
In addition, in the coming period, Vietnam needs to promote energy transition, increase the proportion of biofuels such as E10 to reduce dependence on imports. Vietnam has agricultural advantages, especially raw materials such as corn, cassava, sugarcane. If biofuels are well developed, it will contribute to reducing pressure when the oil market fluctuates.
BSR proposes to buy crude oil directly from Ruby, Bunga Orkid and Chim Sao
Talking to Lao Dong Newspaper, Mr. Nguyen Viet Thang - General Director of Binh Son Refining and Petrochemical Joint Stock Company (BSR) - a member unit of Vietnam National Energy and Industry Group (Petrovietnam) said that Dung Quat Oil Refinery is using about 30-35% of imported crude oil, mainly from West Africa, the Mediterranean region, the United States and partly from the Middle East.
To minimize the risk of crude oil shortage causing Dung Quat Oil Refinery to adjust down capacity or not complete the assigned plan, BSR has proposed to competent authorities and Petrovietnam to consider a priority mechanism for BSR to purchase maximum crude oil and condensate exploited domestically. At the same time, BSR proposed that management agencies apply a temporary mechanism to prioritize domestic crude oil for Dung Quat Oil Refinery to process finished petroleum products, as well as limit domestic crude oil exports during the peak risk period (until the end of the third quarter of 2026 or until the international market stabilizes), in order to ensure national energy security.
To ensure sufficient oil for operation in May-June 2026, BSR proposes to be allowed to directly purchase crude oil from the Ruby, Bunga Orkid (BO) and Chim Sao blocks delivered during this period at the highest bidding price of the most recent period, as a temporary solution to ensure timely supply in the context of strong market fluctuations.
