Goldman Sachs said in a report released on Monday that the global oil stocks are approaching their lowest level in eight years.
The investment bank predicts in its report that global oil inventories, including onshore and offshore crude oil reserves and refined product inventories, are currently sufficient to meet 101 days of global demand, approaching an eight-year low, and could fall to 98 days by the end of May.
As for refined oil products, global inventories were able to meet 50 days of demand before the outbreak of the war in the Middle East, but the stored supplies are now only sufficient for 45 days, the report said.
Analysts said that rapidly depleting inventories of petrochemical products such as naphtha and liquefied petroleum gas, as well as jet fuel, will lead to a growing risk of supply shortages in some economies.
Chevron CEO Mike Wirth recently said that the current situation in the Strait of Hormuz is the main concern regarding supply issues. He stressed that the key issue is not oil prices, but rather how to obtain fuel.
Oil prices went down on Wednesday amid rising market expectations that the United States and Iran are nearing the end of hostilities and that normal passage through the Strait of Hormuz will be restored.
Global oil stocks approaching lowest level in eight years: Goldman Sachs
The global energy crunch and its impacts on Southeast Asia are driving efforts to link the power grids of ASEAN member states, with officials and analysts saying the push could strengthen energy security and accelerate the shift to renewables.
For decades, the idea of an interconnected ASEAN power grid has been on the regional agenda. The current crisis in the wake of wars in Iran and other Gulf states has added urgency, highlighting both the region's diverse energy resources and its vulnerabilities.
Some countries in the region have abundant natural gas or hydropower, others hold vast solar potential, while countries like Singapore rely almost entirely on imports. Even power-producing nations at times face shortages, making cross-border supply an attractive solution.
"It will help us to strengthen our energy security. And of course, a diversified and cheaper supply of energy will boost our regional economic integration and economy. So I think everyone benefits from this," said Chheang Vannarith, chairman of the Cambodian National Assembly Advisory Council.
Malaysia, as ASEAN chair last year, pressed for stronger commitments. Analysts say the current crisis is sharpening focus on the issue.
"It is definitely a wake-up call. It acts as a catalyst. It is also our hope that the Philippines, as the chair of ASEAN this year, and given the circumstances that we are in today with the global energy crisis and the global supply crisis, that this agenda is put at the forefront of the ASEAN discussion," said Amir Fareed Raheem, geo-economist at KRA Group, an ASEAN-focused public affairs and political risk consultancy.
Even as the idea gains momentum, major challenges remain ahead in terms of agreeing on regulations, technical standards and pricing. Further out still are the more ambitious proposals, such as undersea cables to transmit hydropower from northern Malaysia to Singapore and beyond.
Despite the lingering questions, tangible progress is being made. Since 2022, a flagship pilot project has enabled hydropower from Laos to flow through Thailand and Malaysia to Singapore. An agreement signed earlier this year will double its maximum capacity.
"Eleven countries, [with] different systems, different pricing mechanisms. It has to be tested in smaller groupings first before it is scaled up to the whole ASEAN operating system," said Raheem.
With countries striving to expand renewable energy and the crisis straining supplies, consensus is building to move the ASEAN power grid from long-standing aspiration to practical reality.
ASEAN power grid integration gathers pace amid energy crisis
