Vietnam Faces Flight Cuts as Fuel Export Bans Create Aviation Crisis

Vietnamese aviation officials are warning airlines to prepare for significant flight reductions starting in April due to jet fuel shortages. China and Thailand have stopped exporting aviation fuel amid regional conflicts, forcing Vietnam to scramble for alternative suppliers.

Aviation officials in Vietnam are alerting the country’s airlines to brace for substantial flight cuts beginning next month as fuel export restrictions from neighboring countries threaten to create widespread shortages.

The crisis stems from China and Thailand’s decision to halt jet fuel exports due to regional conflicts, leaving Vietnam scrambling to secure adequate aviation fuel supplies. The country relies heavily on imports for more than two-thirds of its aviation fuel requirements, with 60 percent traditionally sourced from these two nations, based on regulatory documents and importer records reviewed by Reuters.

Vietnam’s Civil Aviation Authority issued a stark warning in a March 9 memo to transportation officials, stating: “There are risks of jet fuel shortages for Vietnamese airlines from the beginning of April and the following months.”

The regulatory agency has directed airlines to reassess their operational schedules, particularly for domestic flights, while instructing airport facilities to arrange additional aircraft parking areas for Vietnamese carriers. Supply disruptions have also affected shipments from Singapore, according to official documentation.

Two major fuel importers, Petrolimex and Skypec, indicated in separate communications that they can only assure aviation fuel availability through March. Skypec has recommended that authorities limit air transportation to critical domestic routes should the regional situation continue to deteriorate.

These warnings followed China’s initial guidance to refineries against new export agreements earlier this month, which later escalated to a complete prohibition on refined fuel exports effective March 11. Thailand implemented its own ban on refined petroleum product exports, including aviation fuel, on March 6, with exceptions only for Myanmar and Laos.

Neither the aviation regulator, transportation ministry, nor the importing companies provided responses to requests for comment. Vietnam’s leading carriers, Vietnam Airlines and VietJet, also declined to offer statements.

According to Chinese customs records, Vietnam ranked as the third-largest purchaser of aviation kerosene from China in the previous year, trailing only Australia and Japan.

Vietnamese officials have initiated diplomatic discussions with both affected supplier nations. During a previously scheduled meeting in Hanoi on Sunday, Foreign Minister Le Hoai Trung requested “close coordination to ensure energy security” from his Chinese counterpart Wang Yi, as reported by the Vietnamese government’s official news platform.

A representative from China’s foreign ministry indicated on Monday that Beijing remains prepared to enhance cooperation with Vietnam and other nations in addressing energy security challenges.

Prime Minister Pham Minh Chinh also appealed to Thailand for assistance during a Friday meeting with the Thai ambassador to Vietnam, according to state media coverage.

Vietnam’s aviation authority has suggested exploring alternative supply sources, identifying South Korea, Japan, Brunei, and India as possible options. However, officials acknowledged that “in the current context it is difficult to find new suppliers.”

The country’s two domestic refineries face constraints in expanding jet fuel production due to pressure to increase output of other petroleum products, further complicating the supply situation.

Beyond supply concerns, escalating fuel costs are creating additional industry challenges, with many flight routes becoming financially unviable due to price increases.

Both Petrolimex and Skypec have reported that surging jet fuel prices are pushing them toward credit limits, prompting requests for more flexible banking arrangements until market stability returns.

Current jet fuel trading prices in Singapore have reached approximately $157 per barrel on a cost and freight basis, representing more than a 50 percent increase from pre-conflict levels, according to LSEG pricing information.