KUALA LUMPUR: Southeast Asian states competing for Russian crude oil are prioritising easing domestic fuel shortages over potential friction with allies such as the United States or European countries which support Ukraine in its war against Moscow, say analysts.
Ukraine criticised a US decision on Apr 17 to extend a waiver allowing Russia to sell oil despite Western sanctions, saying that these proceeds will fund the war.
The US’ move allowed the purchase of Russian oil and petroleum products already loaded on vessels at sea until May 16.
The US argued that the waiver is meant to ease the energy supply crunch triggered by a separate war with Iran, which began in February, although analysts told CNA that Washington might still look unfavourably on countries buying Russian oil and gas.
The experts also warned that continued reliance on Russia for energy risks increasing Moscow’s leverage on bilateral relations and potential tension with countries in the Middle East, which have been attacked by Russia-aligned Iran and which also have long-term crude oil contracts with some Southeast Asian states.
“Countries must decide whether the short-term gains (of buying Russian energy) are worth the long-term repercussions,” said Yohanes Sulaiman, an international relations expert at Indonesia’s Achmad Yani University.
Association of Southeast Asian Nations (ASEAN) member states, including the Philippines, Malaysia, Indonesia, Vietnam and Myanmar, have shown interest in buying Russian oil and gas amid dwindling domestic reserves.
This comes as the continued closure of the Strait of Hormuz created an immediate physical shortage in a region that depends on the Gulf for over half of its oil and gas imports.
As a result, Southeast Asian countries turned to the next available energy source seen as near and affordable enough in a rush to secure supplies, analysts said.
“In this context, Russia offers available volumes with cargoes available at sea, which can be redirected to where they are needed,” said Abdelaziz Albogdady, market research and fintech strategy manager at financial services firm FXEM.
“At the same time, the temporary US waivers have made these flows commercially viable despite sanctions.”
But Albogdady warned that over time, dependence on a “geopolitically sensitive” supplier like Russia could create vulnerabilities and friction with the US and its allies.
“Additionally, reliance on Russian oil also increases exposure to disruptions as the Russian energy infrastructure is regularly subjected to damage,” he said.
Beyond geopolitical concerns, another question is whether there is enough Russian oil to go around.
Ukraine has launched attacks on Russia”s energy infrastructure in the Black Sea and Baltic Sea, disrupting its ability to boost exports, said Muyu Xu, senior crude oil analyst at the global trade data firm Kpler.
Xu told CNA this has caused Russian exports to drop “slightly”.
“Ukraine is not happy with the US sanctions waiver, so they have been increasing their drone attacks on Russian infrastructure,” she said.
“Even though right now the market is really good – (Russia) can sell their oil at higher prices, and more countries are willing to take them – the real capacity is an issue.”
CAN RUSSIA EXPORT ENOUGH OIL?
Last week, Washington renewed a waiver allowing countries to buy sanctioned Russian oil and petroleum products already loaded on vessels at sea for about a month until May 16.
The latest move replaces a 30-day waiver that expired on Apr 11 and excludes transactions involving Iran, Cuba and North Korea.
It came after countries in Asia pressed Washington to allow alternative supplies to reach the market, even as Treasury Secretary Scott Bessent said days earlier that the waiver for Russian oil would not be renewed, Reuters reported on Apr 18.
Russian President Vladimir Putin’s special envoy Kirill Dmitriev said an extension of the US waiver will cover another 100 million barrels of Russian oil, bringing the total volume covered by both waivers to 200 million barrels.
But Kpler data shows that since March, the Philippines is the only Southeast Asian country to have imported oil cargoes from Russia, Xu said.
On Apr 14, Manila said it was seeking US permission to buy more Russian crude. The import-dependent country secured nearly 2.5 million barrels in March from Russia for its sole oil refinery after seeing at least four million barrels in shipments from the Middle East cancelled since the start of the US-Israeli war on Iran.
While Xu noted that other ASEAN states were negotiating oil purchases with Russia, she questioned how much cargo they could actually secure.
“Because right now, primarily the cargoes are taken by the Indians and the Chinese, so availability is an issue,” she said.
On Apr 18, Malaysia Prime Minister Anwar Ibrahim said that many European and American countries that previously sanctioned Russia were now competing to buy its oil, local media reported.
Citing Malaysia’s “good” relations with Russia, he said national oil company Petronas was set to negotiate with Russia to buy oil and ensure a sufficient supply for domestic use.
Asrul Sani, associate vice-president at strategic advisory firm The Asia Group, said Anwar has visited Russia twice since taking office, reflecting Malaysia’s longstanding posture of pragmatic, non-aligned engagement with major powers.
“Access to Russian oil will still depend on pricing and sanctions constraints. Larger buyers such as China and India dominate Russian export flows. That could limit availability for smaller markets like Malaysia,” he told CNA.
In December 2022, an international coalition of countries – including the United States, Group of Seven (G7) countries, the European Union, and Australia – imposed a price cap on Russian oil to limit Moscow’s oil revenue that could be used to fund its war against Ukraine without disrupting global oil flows.
This sanction restricts Western maritime services like insurance and shipping only to Russian oil sold below a specific price.
Thailand’s Deputy Prime Minister Phiphat Ratchakitprakarn said in March his country has also held discussions with Russia on potential crude purchases, with negotiations understood to be underway.
Nithin Prakash from Rystad Energy said Thailand’s access depends on residual volumes after primary buyers have secured cargoes, and whether pricing is attractive enough to justify the trade.
“Those larger buyers continue to take the bulk of volumes, so what’s left tends to move more opportunistically,” he told CNA.
“In practice, Thailand tends to pick up barrels when they’re available, rather than being a primary destination.”
But Prakash said the total cost of importing cheaper Russian oil might not be that lucrative either.
“After accounting for longer shipping distances, elevated freight and insurance costs, and potential blending or refining adjustments, the net economic benefit is reduced,” he added.
On Apr 13, Indonesian President Prabowo Subianto met Putin in Moscow to discuss the ongoing war in the Middle East and seek economic and energy cooperation.
The state visit was followed by a meeting between Indonesian Energy Minister Bahlil Lahadalia and his Russian counterpart Sergey Tsivilev a day later.
“(The outcome of the meeting) was quite encouraging. We will receive a supply of crude (oil) from Russia,” Bahlil said in a statement on Apr 16, adding that shipments could start as early as April.
The Jakarta Post reported on Friday that Indonesia has secured a commitment from Russia to supply up to 150 million barrels of crude oil at a “special price,” according to Prabowo’s special envoy for energy and the environment Hashim Djojohadikusumo.
Hashim said the deal was secured during Prabowo’s three-hour meeting with Putin on Apr 13, and that the strategic petroleum reserve is a critical buffer against what he described as impending global economic turmoil.
While cooperation with Russia may serve as a short-term solution, it should not distract Indonesia from accelerating its transition to renewable energy, said Fabby Tumiwa, chief executive officer of the Institute for Essential Services Reform, an Indonesia-based think-tank.
“What we are facing today is fundamentally a fossil energy crisis, highlighting how vulnerable Indonesia’s energy system is to geopolitical shocks beyond its control,” he told CNA.
“As long as Indonesia remains dependent on imported oil and liquefied petroleum gas, any global conflict will directly pressure the state budget, increase subsidy burdens, and disrupt economic stability.”
At the moment, ASEAN states do not really have a viable alternative to Russia when it comes to importing oil, Kpler’s Xu said.
She highlighted that oil-producing Southeast Asian states are prioritising supply to their own refineries, and that it is not feasible for them to buy from West Africa, Latin America or the US due to the sheer distance and lack of volume.
“With this war, we’re now talking about 11 (million) to 12 million barrels per day of supply loss. It’s very difficult for the countries to offset or to find other sources,” Xu said.
“You can add maybe 1 million barrels per day from the US, but that’s nothing compared to that 12 million barrels per day loss.”
GEOPOLITICAL RISKS
This means that ASEAN states will not be too concerned about hurting relations with Ukraine or other countries by buying Russian oil, Xu suggested.
“They’re seeing their oil storage down to critical levels, and if they cannot secure enough supply, they’re facing some real economic and social consequences,” she added.
“So, those diplomatic concerns – I don’t think that’s the primary concern at this moment.”
Asrul from The Asia Group says opposition from Ukraine is unlikely to factor significantly in Malaysia as domestic considerations will “override global reputational risks”.
Buying Russian oil could risk perceptions among key Western partners that Malaysia is engaging in transactions that test existing sanctions, at a time when Putrajaya is seeking to attract Western investment in semiconductors and digital infrastructure, he explained.
“It may also test Malaysia’s carefully calibrated non-alignment, raising questions in Washington and Brussels about Putrajaya’s reliability as a strategic partner,” he said.
Despite that, Asrul asserted that internal pressures would prove “more decisive” for Malaysia.
“The fuel subsidy bill is already strained by global price volatility. With a general election approaching, fuel price stability has become a political priority,” he said.
Malaysia must hold its next General Election by February 2028.
ASEAN members seen as closer to Russia have made concrete moves.
In March, Vietnamese Prime Minister Pham Minh Chinh made a four-day visit to Moscow where he met Putin, following the latter’s state visit to Vietnam in 2025.
During Chinh’s visit, Russia’s largest liquefied natural gas producer Novatek signed a preliminary contract with a Vietnamese buyer and said it is ready to begin supplies in the near future, local media reported.
Myanmar’s Electricity and Energy Minister Ko Ko Lwin also visited Moscow in April to discuss securing crude oil and petroleum products at preferential rates based on the countries’ “bilateral friendship” under a long‑term supply arrangement, the Irrawaddy news outlet reported.
Myanmar and Russia maintain a close strategic partnership, with Russia acting as a primary arms supplier and political ally to Myanmar’s military junta since the 2021 coup.
FXEM’s Albogdady said ASEAN members’ varied approaches reflect differences in geopolitical alignment, economic priorities and risk tolerance, as well as the capacity to secure other sources.
“Some countries are more focused on minimising import costs and ensuring energy security. Others, particularly those with closer ties to Western financial systems or greater exposure to global trade networks, could be more cautious,” he said.
“In addition, technical factors such as refinery configurations and the suitability of Russian crude grades as well as other factors such as the severity of the shortage also influence decisions.”
However, Yohanes from Achmad Yani University cautioned that ASEAN countries should still be careful about turning to Russian oil.
“Europe will certainly air their displeasure because it gives Russia much needed money to continue their offensive on Ukraine,” he said.
“Middle Eastern countries also won’t like it, not only because they stand to lose their regular buyers, but also because Russia is an ally of Iran, a country which recently has been targeting their ships and refineries using Russian weapons and technologies.”
Russia can also leverage other countries’ desperation for its oil, said Teuku Rezasyah, an international relations expert from Indonesia’s President University.
“Russia can push for more economic cooperation, force them to buy Russian military equipment or even align themselves with global agendas pushed by Russia,” he told CNA.
NOT A PERMANENT SHIFT
With that said, analysts believe the scramble towards Russian oil will not be a permanent shift.
Prakash from Rystad Energy said refiners are increasingly looking for “incremental barrels” that can help manage costs, amid higher freight and product prices due to the war.
“Russian crude fits into that picture, not as a long-term replacement, but as an opportunistic addition when the economics line up,” he said.
Kpler’s Xu said some Southeast Asian countries have long-term contracts to purchase Middle Eastern crude oil, which is “relatively close” at 20 days to 30 days’ voyage by sea.
Russian oil takes “slightly longer” to arrive and is still dominated by Chinese and Indian buyers that have “established networks and trading partners” with Russia, she said.
“I think right now, Russian oil is more like a temporary solution to fill the supply gap. I don’t think any countries are ready to dramatically or fundamentally shift their energy structure,” Xu added.
“They buy Russian oil only because it’s readily delivered. It’s closer, it’s ample and it’s cheap. Moving forward, once this war ends, they probably will go back to where they were before.”
Additional reporting by Nivell Rayda and Jack Board