Asia energy resilience test
- Japan has been promoting its oil stockpiling model to Asian neighbours as war-driven fuel disruptions intensify. - A Japan-led POWERR Asia framework was reported as a roughly $10bn initiative aimed at stabilising regional supply chains. - Meanwhile ASEAN refineries are cutting output and proposed oil-sharing mechanisms face capacity hurdles, increasing near-term resilience risks ( ).
Japan is pitching its oil stockpiling system across Asia as fuel disruptions from the Strait of Hormuz crisis expose how thin the region’s buffers are. (abc.net.au) Japan holds more than 400 million barrels in stockpile sites around the country, including offshore barges near Kitakyushu, and Prime Minister Sanae Takaichi said this week Tokyo would offer almost $14 billion in loans and assistance to Asian countries to buy alternative crude and build storage systems. (abc.net.au) Tokyo’s new Partnership on Wide Energy and Resources Resilience Asia, or POWERR Asia, puts the package at about ¥1.5 trillion, or $10 billion, and says it could support up to 1.2 billion barrels a year of crude imports — roughly one year of Association of Southeast Asian Nations crude oil imports. (mofa.go.jp) The plan pairs emergency finance for crude and fuel purchases with longer-term work on storage tanks, release rules, critical minerals and alternative fuels. Japan announced it at an Asia Zero-Emission Community summit attended by leaders from the Philippines, Malaysia, Singapore, Thailand, Vietnam, Bangladesh, Timor-Leste and South Korea. (mofa.go.jp) The problem is immediate because many Asian refineries depend on Middle East crude that normally moves through Hormuz. ABC reported in March that Asia’s refining countries get about 60 to 70 per cent of their crude from the Middle East, while importers farther down the chain are waiting for whatever refined fuel is left. (abc.net.au) Japan has been willing to coordinate and finance supply, but it has been cautious about draining its own reserves. ABC reported that Vietnam asked for oil from Japanese stockpiles, the Philippines requested assistance and received diesel, and Indonesia and India discussed swap deals involving liquefied natural gas, naphtha and crude. (abc.net.au) Southeast Asia is also trying to build its own backup system. ASEAN economic ministers agreed in March to speed up the ASEAN Petroleum Security Agreement, which lets a member request help after a supply shortfall of at least 10 per cent of normal demand lasting 30 days. (nationthailand.com) That mechanism still runs on voluntary, commercial sales, not automatic emergency transfers. Nation Thailand reported that exporters’ cargoes are often tied up in long-term contracts, and any distressed country would still pay market prices even during a war-driven spike. (nationthailand.com) Thailand’s own response shows the strain inside the region’s fuel system. After ordering a first-ever 2 baht-a-litre cut in ex-refinery diesel prices earlier this month, Bangkok said on April 18 that refining margins had averaged about 15 baht a litre in the first half of April, versus just over 7 baht in March, and it was preparing a second cut. (nationthailand.com) The near-term test is whether financing, swap deals and voluntary sharing can move faster than shortages. Japan’s stockpile model offers time and storage; the rest of Asia is still trying to turn that into a regional system before the next supply gap opens. (abc.net.au)
