Japan has announced a substantial financial commitment of $10 billion (approximately £7.4 billion) to support its Asian neighbours in securing vital energy resources, including crude oil. This initiative comes as the region grapples with significant disruptions to energy supplies, exacerbated by ongoing geopolitical tensions, particularly concerning the Iran war and potential blockades of critical shipping routes.
Framework for Energy Cooperation
Prime Minister Sanae Takaichi unveiled the new cooperation framework on Wednesday following an online meeting with other Asian leaders. The program is designed to assist Asian countries in procuring crude oil and petroleum products, strengthening supply chains, and expanding energy stockpiles. Japan’s own economic stability is closely linked to these supply chains, as the nation relies on South East Asia for petroleum-derived products essential for manufacturing, including medical equipment.
“Japan is closely interconnected with each Asian country through supply chains and mutually dependent with them,” Takaichi stated during a press briefing. This interdependence underscores the strategic importance of regional energy security for Japan and its neighbours.
Vulnerability of Asian Energy Routes
The initiative addresses the acute vulnerability of Asia’s energy supply to disruptions in the Strait of Hormuz. According to Japan’s foreign ministry, nearly 90% of the oil and gas transiting this crucial waterway is destined for the Asian region. The financial aid package, amounting to $10 billion, is reportedly equivalent to approximately one year’s worth of crude oil imports for the countries within the Association of Southeast Asian Nations (Asean).
Leaders from several nations, including the Philippines, Malaysia, Singapore, Thailand, Vietnam, Bangladesh, and South Korea, reportedly welcomed the initiative. Funding for the project is expected to be drawn from a variety of sources, including state-backed institutions such as the Japan Bank for International Cooperation and Nippon Export and Investment Insurance, alongside the Japan International Cooperation Agency and the Asian Development Bank.
Japan’s Domestic Energy Concerns
Despite the significant pledge to regional partners, concerns about Japan’s domestic oil supplies persist. The country’s strategic oil reserves, which held enough oil for 254 days of domestic consumption at the end of 2025, have been tapped into due to the global energy crisis. Last month, Japan released a record 50 days’ worth of oil from its reserves, with plans for an additional 20 days’ worth to be released in early May.
Furthermore, anxieties are mounting over potential shortages of naphtha, a critical petrochemical derived from crude oil and a key component in the production of plastics. These worries are particularly pronounced within Japan’s healthcare sector, where essential medical supplies like syringes, gloves, and dialysis equipment are manufactured using naphtha. While Prime Minister Takaichi has urged calm and assured that immediate disruptions are unlikely, the potential for naphtha shortages remains a concern, potentially adding further strain to Japan’s healthcare system, which is already facing challenges due to an aging population.
Regional Calls for Action
Across South East Asia, governments are also contending with soaring oil prices. Many nations have implemented energy conservation measures, urging citizens to carpool and reduce air-conditioning use. The Philippines, in particular, has declared a national energy emergency.
During the same summit hosted by Japan, Philippine President Ferdinand Marcos Jr. called for Asean to activate its fuel-sharing pact. “No single country in Asia can insulate itself from supply chain shocks of this scale by acting alone,” he emphasized, highlighting the need for collective action and regional solidarity in the face of escalating energy challenges.
