HANOI, May 13 (Reuters) - Vietnam has diversified its supplies of oil and refined oil products after the outbreak of the Iran war in late February.
The strategy has softened the immediate impact of the crisis, but has led to high inflation and an unusual trade deficit for the export-reliant nation, as import costs rose exponentially.
VIETNAM RELIES ON KUWAIT
Vietnam relies on imported oil for its refineries, mostly from Kuwait, which covered about 80% of the 14.2 million metric tons, or 284,000 barrels per day, of the crude oil Hanoi purchased last year.
In the first four months of 2026, imports fell 23% from a year earlier to 3.8 million tons, with shipments from Kuwait dropping 37.5% to 2.5 million tons, according to Vietnam Customs, with no shipments in April.
Hanoi has struggled to raise crude output in recent years as reserves at key oil fields decline.
Domestic production last year was flat at 8.2 million tons. Output in the January-April period rose 14.4% from a year earlier to 2.9 million tons, as the country sought to offset the lower imports.
REFINERIES HAVE OIL UP TO JULY
Vietnam has two operational refineries that meet about 70% of domestic fuel demand, mainly for gasoline and diesel.
The plants often run above designed capacity and can process more than 16.5 million tons of crude a year. They have secured sufficient feedstock for full operations only for the next few weeks.
The 200,000-bpd Nghi Son refinery, the country's largest, has relied almost entirely on Kuwaiti crude since starting commercial operations in 2018.
The refinery, majority-owned by firms from Kuwait and Japan, has faced supply disruptions from the war. It said in May it had secured crude for operations only through June, and was considering purchases via tenders or spot cargoes.
It has diversified imports by purchasing supplies from Africa and the United States.
Data from ship-tracking provider Kpler shows the country has imported crude from Nigeria, Angola, Oman, the United Arab Emirates and the United States since the war started on February 28.
The country's second refinery, almost entirely owned by state firm Petrovietnam, has a capacity of 130,000 bpd and relies largely on domestic crude. It said last month it had secured crude supplies for full operations until early July.
Although Vietnam is a net crude importer, it still exports a small share of its output, with exports at 2.5 million tons last year.
FUEL, LNG IMPORTS
Vietnam needs to import refined fuels to fully meet domestic fuel demand.
Imports of refined petroleum products in the first four months of 2026 rose 28.7% from a year earlier to 4.1 million tons, while liquefied petroleum gas imports climbed 34.5% to 1.3 million tons.
Vietnam has urged the country's refineries to boost jet fuel production after local airlines were forced to cut some domestic services due to jet fuel constraints.
The refineries can meet one-fifth of the country's demand for jet fuel in normal conditions. Most of its jet fuel is imported, mainly from China and Thailand, which have restricted exports after the outbreak of the war.
War-induced shortages of liquefied natural gas have largely spared Vietnam which began importing small amounts of LNG in 2023, when it launched its first terminal for its nascent LNG industry.
While LNG imports remain modest, the government has said it intends to become a major buyer by the end of the decade, with plans to develop LNG-fired power plants with a combined capacity of about 22.5 gigawatts from 1.6 GW now.
Reporting by Khanh Vu, Francesco Guarascio; Editing by Christian Schmollinger
Source: Reuters