Asian Refined Oil Shipments Plummet 35%
A severe energy crisis is rippling through Asia, causing a collapse in fuel demand as prices soar. According to a March 19 JPMorgan research report, shipments of refined oil products from major Asian exporters have plunged approximately 35% from their five-month baseline. The drop demonstrates that demand destruction is no longer a forecast but an unfolding economic reality.
The impact varies by fuel type, with the sharpest contractions seen in discretionary consumption. Shipments of aviation kerosene have fallen by over 40% as airlines ground fleets. Gasoline demand is down by more than 30%, and diesel has contracted by over 20%, reflecting a slowdown in transport and logistics. JPMorgan warns that if Brent crude prices average $100 per barrel for March, the price effect alone could eliminate 1 million barrels per day of global oil demand in April.
Governments Impose Emergency Measures as Economies Stall
Faced with dwindling fuel inventories and surging prices, governments across Asia are implementing emergency measures to force conservation. The Philippines and Sri Lanka have mandated four-day work weeks to cut diesel consumption for commuting. Elsewhere, Pakistan and Bangladesh have closed schools and universities, while Thailand has ordered officials to work from home.
The aviation industry has been one of the first and hardest hit. With jet fuel prices nearing $200 per barrel, carriers are cutting capacity. Air India imposed fuel surcharges of up to $200 on long-haul flights to Europe and North America, effectively pricing out leisure travelers. Scandinavian Airlines (SAS) canceled around 1,000 flights scheduled for April, and Air New Zealand also eliminated over a thousand flights, citing unsustainable fuel costs.
Petrochemical Giants Declare Force Majeure Amid Supply Chain Break
The crisis has extended from fuel consumption to industrial production, snapping critical supply chains. The Asian petrochemical sector, which relies on the Middle East for over 50% of its naphtha feedstock, is grinding to a halt. South Korea’s YNCC, a major ethylene producer, declared force majeure due to raw material shortages. In Japan, Mitsubishi Chemical and Mitsui Chemicals have cut ethylene output.
This industrial shutdown signals a deeper economic impact, as shortages of key chemicals threaten downstream manufacturing. In Indonesia, Chandra Asri declared force majeure after a sudden interruption of raw material deliveries. The South Korean government has taken the extraordinary step of designating naphtha an "economic security item" to manage its rapidly depleting national inventory.
