SINGAPORE, March 15 (Reuters) - Thailand’s national oil company PTT Plc has bought its first cargo of Colombia Castilla crude in a bid to reduce its reliance on Middle Eastern imports as escalating tensions between the West and Iran threaten supply, shipping and trade sources said on Thursday.
“Seventy percent of Thailand’s crude imports come from the Middle East so it is looking at Latin America and West Africa for supply in case something happens in the Straits of Hormuz,” a source close to the company said.
The Straits of Hormuz is a key oil route, through which a fifth of the oil traded worldwide passes.
PTT bought 2 million barrels of Colombia’s Castilla crude, to be loaded onto a very large crude carrier in late March, one of the sources said. Part of the heavy sweet crude will be blended and used locally while the remainder is available for sale, sources said.
A shipping fixture showed PTT had provisionally booked VLCC Sarah or Saturn Glory for about $5 million to load crude in Venezuela on March 27-31 and head for Singapore or Thailand.
The arbitrage could also help ease tight supply of heavy sweet crude in Asia as output in Australia has been affected by tropical storms, while South Sudan shut down production in January in a dispute with Sudan.
Growing pressure from the West to reduce Iranian crude purchases has pushed other refiners in Asia to source for oil from other producers in the Middle East as well as Russia, West Africa and Latin America. One such buyer is Taiwan, which started the process last year by reducing its Iranian imports by half and increased supply from Angola. (Reporting by Florence Tan, Jasmin Choo and Yaw Yan Chong; Editing by Chris Lewis)