Vietnam's Oil Supply Diversification Amid Iran War

In response to the Iran war, Vietnam has embarked on diversifying its oil supply sources to manage the economic repercussions of the conflict. While this strategy has dampened the immediate impact, it has concurrently triggered high inflation and a notable trade deficit due to soaring import costs.

Vietnam's reliance on Kuwaiti oil for its refinery operations is substantial, with about 80% of its crude imports traditionally coming from Kuwait. However, the first four months of 2026 saw a 23% reduction in imports, alongside a significant 37.5% drop in shipments from Kuwait, with April witnessing no deliveries at all.

Domestic oil production has made strides to counterbalance the decline, with output rising 14.4% year-on-year in early 2026. Meanwhile, Vietnam's two refineries are aggressively pursuing other suppliers, including sources from Africa and the U.S., to secure constant operations amid uncertainties stemming from war-induced disruptions.

(With inputs from agencies.)