Laos has secured a formal petroleum supply agreement with Thailand’s state-backed PTT Group, reinforcing fuel security amid uncertainty in regional energy markets.

The Lao State Fuel Company signed the cross-border agreement with PTT Group in Vientiane on 2 June, with senior officials from both countries attending the ceremony.

The deal aims to ensure a stable and standardized fuel supply while strengthening energy cooperation between Laos and Thailand.

It also formalizes a critical supply relationship for Laos, which has no operational oil refinery and relies on imported refined petroleum. A domestic refinery remains under development.

Thailand supplies more than 97 percent of Laos’ refined fuel imports and remains the country’s largest trading partner. In 2025, Laos imported more than USD 4.4 billion worth of Thai goods, with diesel accounting for nearly a quarter of that total.

The agreement comes after the Strait of Hormuz crisis tested Laos’ dependence on imported fuel. Following the waterway’s closure in March, Thailand suspended most refined oil exports to protect domestic reserves, exempting only Laos and Myanmar.

During the crisis, Laos remained Thailand’s largest fuel export destination, receiving around 5.29 million liters per day, even as volumes dropped 25 percent from pre-crisis levels.