Iran-US- Israel Ceasefire Offers Laos Fuel Relief After Six Weeks of Crisis

This Week

On 7 March, The United States, Israel, and Iran agreed to a two-week ceasefire in the Middle East, temporarily halting hostilities and reopening strategic oil routes through the Strait of Hormuz.

For Laos, this truce offers the first small relief from a six-week fuel crisis that pushed diesel prices up more than 160 percent, emptied patrol stations, and emergency measures across the country.

The conflict began on 28 February, when US and Israeli strikes on Iran killed the country’s Supreme Leader Ali Khamenei. 

Tehran promptly closed the Strait of Hormuz,  the waterway carrying roughly one-fifth of the world’s daily oil supply, and launched retaliatory strikes against Israel and US military bases across the Middle East. 

The global energy shock that followed landed hard in Laos. 

Thailand, which supplies over 97 percent of Laos’ refined fuel, suspended all refined oil exports on 1 March. 

Although Laos and Myanmar were the only two countries exempted from the ban, Thai Prime Minister Anutin Charnvirakul confirmed on 21 March that daily volumes to Laos had still fallen by 25 percent, to 5.29 million liters per day, with Anutin pointing to close energy ties between the two countries to justify the continued supply.

Prices surge, stations run dry

Diesel prices in Laos climbed from LAK 19,970 (USD 0.9) per liter before the crisis to LAK 52,650 (USD 2.40) as of 7 April, a rise of 163 percent in five weeks. This data makes Laos the country with the largest diesel price increase in the world since 23 February, according to Global Petrol Prices.

Regular petrol increased more than 80 percent over the same period, with prices adjusted 10 times in March alone. 

At the crisis peak in mid-March, more than half of Laos’ 2,538 registered petrol stations closed nationwide, as panic buyers emptied Vientiane stations within hours of each restock. Queues stretched for hours across the capital. Diesel proved the hardest fuel to find, a critical blow to freight transport, agriculture, and rural electricity generation.

Emergency Response, Regional Help

The government declared a fuel emergency, cutting diesel excise tax to zero and reducing gasoline tax from 25 to 15 percent. 

Vientiane launched mobile fuel distribution. Champasak province introduced free bus services. Universities cut their teaching week to three days, and civil servants were told to work from home.

To ease the shortfall, Laos turned to its neighbors. 

Industry and Commerce Minister Malaithong Kommasith flew to Hanoi on 20 March and secured 50 million liters of fuel from Vietnam. A separate deal with Thailand locked in a further 14 million liters of emergency diesel, due by 9 April.

The acute shortage has since eased. 

Most stations have reopened and the queues have thinned. But price pain endures. Inflation hit 9.7 percent in March and pump prices remain well above pre-crisis levels with no relief in sight.

A Fragile Truce

Tuesday’s ceasefire, brokered by Pakistan, requires Iran to reopen the Strait of Hormuz in exchange for the US and Israel halting strikes for two weeks and peace talks are scheduled to begin in Islamabad, capital city of Pakistan on 10 April, with US Vice President JD Vance expected to lead the American delegation.

Iran entered talks declaring “complete distrust of the American side.” Missiles flew toward Israel hours after the truce took effect. The ceasefire excluded Lebanon,  and Israel struck Beirut the very next day. 

Iran threatened to pull out if the attacks continued. Tehran continues to call for a full US military withdrawal, permanent control of the Strait of Hormuz, and the lifting of all sanctions.

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