Saudi Arabia and the United Arab Emirates will support a Japanese initiative to bolster oil supplies in Southeast Asia after war-driven disruptions heightened concerns over energy security. Officials from Saudi Arabia and the UAE joined a special session of the Asia Zero Emission Community on Thursday in Manila, where ministers from AZEC’s 11 partner nations — including Japan, Indonesia and Australia — gathered to discuss cooperation on oil purchases and strategic stockpiles. The framework was launched by Japan to promote regional collaboration on energy transition and security.
Both countries from the Middle East expressed their willingness to cooperate on strengthening oil stockpiling capacity in Asia, Japan’s State Minister of Economy, Trade and Industry Takagi Kei told reporters. The members adopted AZEC’s ministerial work program to strengthen oil stockpiling and build participating countries’ capacity to respond to potential supply shocks. In April, Japan announced $10 billion of financial support for Southeast Asian nations struggling with soaring crude prices and supply disruptions from the Middle East war.
Asia bore the brunt of disruptions after the US-Iran war started in late February, exposing a longstanding vulnerability for Southeast Asia, which relies heavily on imported oil. Before the conflict, more than half of the region’s crude imports came from Persian Gulf producers, while Japan sourced about 90% of its oil from the region. The closure of the Strait of Hormuz sent costs soaring and forced some refiners to cut processing and governments to ration fuel supplies.
The proposed framework could allow buying countries to negotiate bilateral supply arrangements with Middle Eastern producers, positioning more crude closer to Asian customers.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing