87% of Vietnam's Oil Comes Through One Strait. It's Closed.

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Today, we look at Vietnam’s oil crisis.

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The take: Vietnam just admitted what the rest of emerging Asia won't say out loud — the Hormuz closure is an economic emergency, not a geopolitical headline.

What happened: Hanoi activated its $200 million fuel price stabilisation fund at midnight on 11 March — the first drawdown since 2023 — after domestic fuel prices surged up to 32% in under two weeks.

Why it matters: Vietnam imports the vast majority of its crude through the Persian Gulf. The Strait of Hormuz has been effectively shut since late February, and Hanoi is burning through policy tools at a rapid pace. It scrapped import tariffs, urged remote work, and now it's raiding the emergency kitty.

What to watch: The IEA (International Energy Agency) holds an extraordinary meeting on Tuesday to discuss a coordinated release of emergency oil stockpiles from its 1.2 billion-barrel reserve.

The government told 100 million people to take the bus and carpool. Diesel is up 50%. Good luck with that commute.

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Vietnam has two refineries.

Nghi Son drinks Kuwaiti crude shipped through Hormuz. Binh Son pivoted — signing contracts with ExxonMobil and Chevron for roughly 3 million barrels of US and Latin American crude between March and May.

Those barrels cover supply through late spring. Nobody has signed anything for June.

Hanoi deployed four policy tools in ten days:

Flexible pricing triggers, tariff cuts, remote-work guidance, and the stabilisation fund.

The government is using up to 5,000 dong per litre to offset retail price increases. At that burn rate, a $200 million kitty sounds generous until you remember the country burns through over 2 million tonnes of fuel a month.

Vietnam is the canary. Pakistan and Bangladesh are standing closer to the mine shaft.

Pakistan sources 99% of its LNG from Qatar and the UAE. Bangladesh gets 72%. Neither has a rainy-day fund nor a second refinery running US crude.

Vietnam is doing everything right. But the maths still barely works.

Pro: The fund activation, tariff cuts, and refinery diversification show Hanoi moving faster than most emerging-market peers — the $200 million buffer buys genuine breathing room while alternatives ramp up.

Con: Four emergency measures in ten days looks less like a plan and more like a government running out of levers — and the maths only works if the crisis stays short.

Our read: Vietnam's speed is real. So is the burn rate. If Hormuz remains shut after April, Hanoi will need the IEA's stockpile release more than its own funds.

[Report] U.S. Energy Information Administration — "Amid Regional Conflict, the Strait of Hormuz Remains Critical Oil Chokepoint" (2026)

Saudi Arabia and the UAE have a bypass pipeline capacity of roughly 2.6 million barrels per day that could avoid the Strait of Hormuz in the event of a supply disruption.

Why it matters: The bypass covers about 13% of normal Hormuz flow. The rest either sit in storage or don't ship. Every analyst citing "pipeline alternatives" should read the fine print.

Diesel +50%. Vietnam's answer: work from home. Reuters

CNBC — Which countries get hit hardest by a Hormuz blockade — Kpler and Nomura data on who bleeds first. Thailand's net oil imports run 4.7% of GDP.

Atlantic Council — What a Middle East oil crisis means for China and East Asia — The LNG disruption might hurt Asia worse than crude. This explains why.

CNBC — Oil retreats 11% after Energy Secretary's deleted tweet — Chris Wright claimed the Navy escorted a tanker through Hormuz. The Navy hadn't. Brent fell 11%. That's how thin the information layer is right now.

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