PTT Public Company Limited (SET: PTT) has announced via the Stock Exchange of Thailand (SET) regarding the Group’s proactive measures to mitigate energy security risks during the crisis of unrest in the Middle East and the closure of the Strait of Hormuz, with the details as follows:
Following the closure of the Strait of Hormuz and the attacks in the Middle East that have occurred since 28 February 2026 to the present, which have disrupted the supply chains of crude oil, refined products, and other products across global markets. PTT Public Company Limited (“PTT”), as a national energy company, places the highest priority on managing its operations to ensure that Thailand has access to energy supplies that are sufficient, secure, and fair.
Accordingly, PTT hereby provides clarification to the public regarding the measures undertaken to manage and mitigate impacts on the energy supply chain, as well as its cooperation in implementing government policies, as follows:
- Business Continuity Management (BCM)
Amid unrest in the Middle East, particularly the blockage of the Strait of Hormuz, energy transportation along this route has been disrupted, causing severe volatility in global energy prices. To ensure effective business continuity management, emergency response, monitoring and assessment of potential impacts, as well as coordination with government authorities and relevant organizations both domestically and internationally, and to secure sufficient energy supply to meet domestic demand efficiently across the entire supply chain, PTT has established PTT Incident Command System (PTT ICS). PTT ICS has called emergency management meetings on a continuous basis, totaling more than 37 meetings to date, with meetings continuing as the situation remains unresolved.
- Crude Oil Procurement System
PTT manages and diversifies risks in crude oil procurement by sourcing from a wide range of suppliers globally, while reducing reliance on the Middle East. Crude oil has been imported from alternative sources, including the United States, West Africa, Latin America, and Malaysia, through the P1 project and the network of PTT Trading, to replace crude oil that could not be procured via the Strait of Hormuz, including vessels stranded within the Strait of Hormuz. This has enabled refineries within PTT Group to operate at full capacity and to produce sufficient refined products of all types to meet domestic demand, despite increases in freight costs, insurance, and other related expenses, as well as the suspension of exports in accordance with government policy. From March to May 2026, around 70 cargoes of crude oil were procured and delivered to refineries within PTT Group, with approximately 30 percent sourced from the Middle East and 70 percent from other regions. Due to longer voyage durations, procurement lead time has been extended from 45 – 60 days to 90 days. Once the situation stabilizes and the Strait reopens, there may be a potential oversupply, which may require the sale of excess crude oil procured in advance at fluctuate prices in line with subsequent global market conditions.
- Refinery Efficiency
In recent years, refineries have undertaken investments to enhance flexibility and energy security, with advance investments exceeding THB 110 billion during 2021 to 2025. This has enabled all three refineries of PTT Group to immediately switch to alternative crude oil sources without affecting production volumes and the country’s energy security, while continuing to operate at full refining capacity. During the recent crisis, PTT Group operated its refineries at an average utilization rate of 105 percent, despite regional refineries reducing their operating rates due to challenges in crude oil procurement and increased price risks. At the same time, refineries within PTT Group have continued to increase diesel production to ensure sufficient supply for domestic demand. This has also resulted in increased production volumes of other refined products, such as Gasoline, Jet fuel, and Fuel oil. Meanwhile, demand for refined products is expected to decline as a result of higher prices. Consequently, all refineries are required to manage inventory storage of other refined products that exceed domestic demand, while also bearing increased operating costs.
- Inventory Reserves and Management
At present, refineries within PTT Group maintain inventories of refined products and crude oil for production at levels exceeding the legal reserve requirements for both refined products and crude oil. During the period of the Strait of Hormuz closure and the attacks in the Middle East, domestic demand for diesel increased from the normal level of approximately 70 million liters per day to 80 – 90 million liters per day. As a result, refineries were required to operate at full capacity in accordance with government policy to ensure sufficient supply for domestic consumption, including addressing shortages of fuel at service stations during the initial stage of the crisis. After Songkran festival period, domestic oil demand has continued to fluctuate at elevated levels, ranging approximately between 30 and 90 million liters per day. PTT Group refineries have therefore continued to operate at high utilization rates, taking into account daily demand volatility and existing storage capacity constraints, in order to ensure that diesel supply remains adequate to meet domestic demand.
- Pricing policy for refined products during crisis
PTT Group supplies refined petroleum products to regular jobbers at selling prices equivalent to the retail prices at oil stations in the respective areas (excluding municipal taxes), to enable the resale of petroleum products to the public and end-users nationwide, including the transportation sector, the agricultural sector, and others, under their own transportation and distribution systems, referred to as the Customer Logistics System.
- Financial Management
The rapid increase in global oil prices and the continued procurement of additional crude oil, particularly from alternative sources located farther from Thailand with longer maritime transportation lead times, have resulted in PTT Group bearing additional liquidity through bank borrowings, leading to a significant increase in financing costs, comprising the following:
- Margin requirements for crude oil procurement, referred to as Margin Call, of approximately THB 63 billion
- Increased working capital for oil and gas procurement of approximately THB 137 billion
- Outstanding receivables from the Oil Fuel Fund related to price compensation of approximately THB 35 billion
In total, the additional liquidity burden exceeds THB 230 billion, leading to an increase in financial cost of over THB 600 million per month, or approximately THB 7 billion per year. These costs are not part of normal business operations and have not been passed on to consumers through oil prices. Instead, they represent costs incurred to mitigate national risk and to ensure that Thailand does not face fuel shortages.
- Transparent Operations and Reporting of PTT Group
PTT Group affirms that there has been no stockpiling of refined products during periods of high domestic demand. PTT Group has operated at full production and distribution capacity, while managing its supply chain transparently to ensure sufficient and continuous energy supply for the public and to support Thailand’s energy security. In addition, PTT Group has disclosed data on oil volumes throughout the entire supply chain, from crude oil procurement, refinery production, transportation and oil distribution, to the sale of refined products via PTT website in order to ensure transparency. Furthermore, PTT Group has continuously reported procurement and distribution plans and volumes to relevant government authorities, including oil sales volumes, import and export data, cost and selling prices, and inventory levels covering imported, purchased, refined, produced, distributed, and remaining quantities as well as inventory by product type. PTT Group has also fully complied with all excise tax payment obligations.
- Corporate Governance
PTT Group adheres to the principles of good corporate governance and conducts its business with transparency. During the aforementioned crisis, all companies within the PTT Group closely coordinated in managing the supply chain and maintaining energy reserves, enabling the country to successfully overcome the crisis. However, in order to comply with the principles of good corporate governance, referred to as the Way of Conduct, and to enhance public confidence. PTT, as the parent company, has ordered the appointment of an “Audit Committee on Refinery Operations and Oil Trading Processes of PTT Group Companies” to perform in depth audits across the entire supply chain, from crude oil procurement, production processes, storage, to distribution, in order to ensure accuracy, efficiency, and compliance with applicable laws and government policies, as well as to apply the findings to improve operational processes towards excellence and transparency on a continuous basis.
