The news from the Middle East continues to be a mix of threats and talk of negotiations. And the ripple effects continue to spread around the world — including to the Asia Pacific.
This week, South Korean conglomerates are starting to cut back on lighting in non-essential areas of office buildings — to reduce energy use.
Today, Japan will start the biggest withdrawal it has ever made from its national oil reserves. The country is releasing roughly 20% of those reserves — the equivalent of about a month's consumption.
Japan is also cutting back its exports of refined oil products — putting the priority on domestic customers.
China has stopped its exports of those refined products. The starting ingredient of oil comes from the Middle East — by way of the Persian Gulf.
The U.S. Energy Information Administration says more than 80% of the crude oil passing through the Strait of Hormuz is bound for Asia.
South Korea, Japan and China all import oil and all export refined oil products — like jet fuel.
The rest of the Asia Pacific is dependent on those energy flows — from the Philippines to Australia and beyond.
Here in Hawaiʻi, the State Energy Office says that for the past decade through the end of last year, 74% of Hawaiʻi's jet fuel imports have come from South Korea — 16% from Japan.
And the longer uncertainty lingers on fuel transport, the higher the impact on fuel prices.
