Asia races to stockpile oil, speed up renewables in response to Iran war

MANILA, - Asian countries are racing to raise their oil stockpiling capacity, complete a regional power grid and speed up renewables in response to supply risks laid bare by the Iran war.

Southeast Asia has been worst hit by the energy impact as 80% of the oil transported through the Strait of Hormuz from the Gulf flowed to the region before the Iran war began.

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"The most advanced efforts are support for the development of oil stockpiling systems in each country and regional joint stockpiling on (a) voluntary basis," nine Southeast Asian nations said in a joint statement issued along with Japan and Australia.

Japan agreed on action plans with its Asian partners to boost crude oil reserves across the region following a meeting of the Japan-led Asia Zero Emission Community (AZEC), a Japanese state minister on trade said on Thursday.

After a separate session with Saudi Arabia and the United Arab Emirates, Japan's State Minister of Economy, Trade and Industry Takagi Kei said they had expressed a willingness to cooperate to strengthen Asia's oil stockpiling capacity.

Philippines, which imports nearly all of its oil and fuel, will create a national reserve by the end of 2027, its energy secretary, Sharon Garin said on Thursday, adding that it could subsequently be converted into a regional stockpile.

The Southeast Asian archipelago is the chair of the Association of Southeast Asian Nations (ASEAN) this year.

Garin said countries will decide if they want to host a regional oil stockpile, and also the terms of sale that should be determined by the country itself.

"In the Philippines, what we want is if there's any country that wants to store the crude or their petroleum products here. In case of any emergency the country gets priority on this on the stocks," she said.

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The ASEAN member countries also pledged to increase the share of clean energy in power generation, targeting 30% renewables in total primary energy supply and 45% in installed power capacity.

The region is among the biggest laggards in green energy.

Renewables make up 14.1% of primary energy, well short of a 2025 target of 25%, while green power has made up 33.7% of total capacity since 2020 against a 2025 target of 35%, the ninth ASEAN energy outlook showed this week.

The countries also reached an enhanced preliminary agreement on developing a long-delayed regional power grid, which Garin called a landmark accomplishment. The concept of a regional electricity network was first announced in December 1997.

"The first study was to connect with 2045, and that's too far because that's 20 years. So they're reviewing again to make it a faster implementation," Garin said.