Thailand has reopened discussions with Russia regarding potential energy cooperation, particularly focusing on the purchase of crude oil. However, Deputy Prime Minister and Energy Minister Pirapan Salirathavibhaga highlighted several obstacles following talks with Russian Deputy Minister of Energy Sergey Mochalnikov.
While Russian crude oil is currently more cost-effective compared to Middle Eastern alternatives, it poses challenges due to its lighter composition, which is not compatible with Thailand’s refineries. Pirapan noted that despite the lower price of Russian oil, importing it could result in substantial transportation costs. Moreover, the private sector is currently unable to procure Russian oil.
Sources within the Ministry confirmed that while Russian crude is cheaper, its light nature complicates cost-effective refining processes in Thailand. The country’s refineries, though advanced, would require significant adaptation to handle such oil economically.
The idea of utilizing Russian light oil has been previously explored but abandoned due to these technical and economic challenges. Even though light oil is cheaper, the additional costs of refining it to produce sufficient quantities of diesel, crucial for Thailand’s consumption needs, make Middle Eastern oil a more viable option.
During the tenure of former Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow, Thailand considered importing Russian oil amid the Russia-Ukraine conflict when prices were markedly lower. However, concerns over oil quality and transportation costs led to the shelving of the plan.
In 2008, under Prime Minister Samak Sundaravej’s administration, Thailand sought to purchase Russian diesel despite acknowledging its lower quality. The proposal aimed to alleviate the impact of high oil prices by importing substantial volumes, primarily for specific sectors like cooperative members and truck operators. The initiative was to be managed by private companies under year-to-year contracts, with assurances of no personal gain from government officials.
Former Deputy Leader of the Democrat Party, Alongkorn Ponlaboot, cautioned about the practicality of the plan, questioning the feasibility of the proposed import timeline and stressing the importance of considering refining capabilities and quality differences.
Thailand’s exploration of energy cooperation with Russia underscores ongoing challenges in balancing economic benefits with technical feasibility in the energy sector.
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