A $10 billion support package has been pledged by Japan to assist neighbouring Asian nations in securing energy supplies, particularly crude oil, as the region grapples with supply disruptions linked to the Iran conflict.
The announcement was made on Wednesday by Japanese Prime Minister Sanae Takaichi following an online meeting with regional leaders.
Speaking at a press briefing, Takaichi noted that Japan depends heavily on Southeast Asia for petroleum-based goods, including critical medical equipment, highlighting the interconnected nature of regional supply chains.
She added that the new cooperation framework is designed to support Asian countries in sourcing crude oil and refined petroleum products, while also strengthening supply chains and increasing strategic stockpiles.
Roughly 90% of oil and gas passing through the Strait of Hormuz is destined for Asia, making the region highly exposed to any disruptions in the waterway.
Japan’s foreign ministry indicated that the $10 billion funding envelope is equivalent to about one year’s crude oil imports for members of the ASEAN.
Officials said leaders from countries including the Philippines, Malaysia, Singapore, Thailand, Vietnam, Bangladesh, and South Korea expressed support for the initiative during the summit, with financing expected to come from multiple institutions.
These funding sources include state-backed entities such as the Japan Bank for International Cooperation, Nippon Export and Investment Insurance, the Japan International Cooperation Agency, and the Asian Development Bank.
Takaichi also assured that the initiative would not disrupt Japan’s domestic fuel supply situation.
At present, Japan holds oil reserves sufficient for approximately 254 days of consumption, although ongoing global energy tensions have prompted authorities to draw down these stocks.
Recently, the country released a record 50 days’ worth of reserves, with plans to potentially release an additional 20 days’ supply in early May.
Concerns are also growing over potential shortages of naphtha, a petroleum-derived feedstock used in plastics production, which is essential for manufacturing medical items such as syringes, gloves, and dialysis equipment.
While the Prime Minister has urged calm and stated that immediate shortages are not expected, apprehension remains, particularly within Japan’s healthcare system, which is already under pressure from an ageing population.
Across Southeast Asia, rising fuel prices have intensified economic strain, prompting governments to encourage energy-saving measures such as carpooling and reduced air-conditioning usage, while the Philippines has declared a national energy emergency.
During the same summit, Philippine President Ferdinand Marcos Jr urged ASEAN members to activate their regional fuel-sharing mechanism.
He emphasised that no individual country in Asia can withstand large-scale supply chain shocks on its own.