Movement in the price of oil has been more subdued today compared to its biggest spike in more than a decade yesterday. A weekend drone attack on Saudi oil facilities could lead to economic pressures in different parts of the world, and that definitely includes the Asia Pacific.
Short-term disruptions in the oil market will send prices skittering over the map, but one question right now in the Asia Pacific and the rest of the world is how long supplies from Saudi Arabia may be affected.
China, India, South Korea and Japan are all big importers of Saudi crude.
Japan’s trade minister says his country has oil reserves for about 230 days of domestic consumption in case of emergency, but could release some of it if needed.
South Korea made a similar statement, the Joongang Daily reports the country had 200 million barrels of oil in its reserves at the end of last year — while Saudi Arabia supplies nearly a third of South Korea’s crude.
India is Saudi Arabia’s second largest customer for oil, and any long-term disruption would likely widen its trade deficit among other impacts.
But one of the most interesting regional oil stories is China — and it’s not just economic, it’s also political. China is the world’s largest importer of crude oil, and takes nearly a quarter of all of Saudi Arabia’s oil exports.
Over the past year, China has cut back on oil imports from the United States and from Iran, and ramped them up from Saudi Arabia.
The Saudis are the number two supplier of oil to China – and politics also plays a role in the relationship with China’s top supplier of oil: Russia.