Cambodia Halts Fuel Imports From Thailand Amid Border Dispute

Cambodia has abruptly halted fuel imports from neighboring Thailand, escalating tensions between the two Southeast Asian countries over a border dispute. Cambodian Prime Minister Hun Manet announced the halt in a Facebook post, stating that Cambodia’s energy companies would source fuel from other suppliers. This move follows a previous call by Hun Sen, the country’s former leader, to halt imports of various goods from Thailand, including canned food products and alcohol. Hun Sen also claimed that a Thai opposition party sought to ban fuel exports to Cambodia, suggesting that such a move would significantly impact PTT, Thailand’s state oil company, more than it would affect Cambodia.

PTT, ranked second on the Southeast Asia 500, is Thailand’s largest energy company. Other major Thai energy companies exporting to Cambodia include Bangchak and Susco. The impact of the halt on Thailand’s energy companies remains uncertain, as Thailand exported 2.3 billion liters of fuel to Cambodia last year, accounting for around 20% of Thailand’s total fuel exports and valued at approximately 48 billion Thai baht. In comparison, PTT generated $87.6 billion in revenue last year, with its biggest overseas markets being Singapore, the U.K., the U.S., and Malaysia. Cambodia was PTT’s seventh largest overseas market.

The border dispute between Thailand and Cambodia has intensified since late May, when troops from both countries exchanged fire over a disputed border, resulting in the death of one Cambodian soldier. Subsequent negotiations have failed to de-escalate the situation, and the crisis is now threatening Thailand’s coalition government. A leaked phone call between Thai Prime Minister Paetongtarn Shinawatra and Hun Sen revealed Paetongtarn urging Hun Sen not to listen to certain factions within Thailand, including an outspoken Thai general. This revelation led to the Bhumjaithai Party leaving Paetongtarn’s coalition, reducing her majority in the parliament. Paetongtarn has since apologized for her language during the call, describing it as a negotiation tactic.

In response to the escalating tensions, Thailand has implemented measures to restrict border crossings into Cambodia, allowing only essential travel. The country has also halted the export of goods, such as fuel and electricity, that could be used in Cambodia. The political crisis has had a significant impact on Thailand’s economy, with the SET Index, which tracks companies listed on Thailand’s stock exchange, experiencing a decline of more than 20% this year, performing worse than during the COVID-19 pandemic in 2020 and 2021.

The border dispute and the subsequent halt in fuel imports highlight the complex political and economic dynamics between Thailand and Cambodia. The situation underscores the potential risks for energy companies like PTT, which rely on exports to neighboring countries. As tensions continue to escalate, the impact on regional stability and economic relations remains a concern for both countries. The halt in fuel imports from Thailand by Cambodia is a significant move that could have far-reaching implications for both countries' economies and political stability. The dispute not only affects the energy sector but also has broader implications for trade and diplomatic relations between the two nations. The situation is fluid, and the outcome remains uncertain, but it is clear that the border dispute has the potential to disrupt regional stability and economic cooperation.