Tourism silence from Thailand to Singapore affecting oil demand

Published on : Wednesday, March 24, 2021

Southeast Asian oil and fuel demand has hit a level after an initial recovery from the Covid-19-induced decline. It appears implausible to get back to pre-virus levels until the end of the year or later.

A slow start of vaccinations and resurgence in cases in the region of almost 700 million people is pushing back the timeline for revival in business as usual. There are still movement related restrictions in parts of Indonesia and Malaysia, while tourist hot spots in Thailand remain closed. The aviation hub of Singapore didn’t witness much success regarding starting travel bubbles with other countries and Myanmar is afflicted by civil unrest following a coup.

Indonesian and Malaysian gasoline demand has recovered “tremendously” since last April last year; however, renewed lockdowns have slowed the impetus. Diesel consumption in Indonesia is expected to be back to normal in the third quarter, but the situation in Malaysia is less certain.

In Thailand, gasoline and diesel demand are both are probably to be 1% higher this year than in 2020. Petron Corp., the Philippines’ largest oil company, is considering starting operations at its idled refinery in the second half with rebound in fuel sales.

In Myanmar, deteriorating protests mean that fuel imports will stay muted till the situation gets better and buyers can regain access to financing, according to Sandra Octavia, an analyst at consultant Energy Aspects.

Efforts are being made to restart travel. Indonesia added Batam and Bintan to a travel corridor arrangement with Singapore that expects to see foreign visitors back in the resort islands from late April. Thailand has also decided to cut down a mandatory quarantine period for foreign travelers from next month.

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