SINGAPORE, Sept 4 — Asian governments are racing to expand strategic oil and gas storage closer to home, six months after the Strait of Hormuz crisis choked off the region’s main supply artery, according to industry analysts and government filings reviewed this week. The crunch began in late February when the United States and Israel went to war with Iran.
Shipping through the strait has since been reduced to a trickle by Iranian attacks and a US naval blockade, forcing Asian capitals to impose fuel conservation measures including price caps, alternate driving days, and work-from-home mandates for civil servants. Japan moved first, announcing in April a $10bn initiative called POWERR Asia under Prime Minister Sanae Takaichi to help Southeast Asian economies procure oil and build strategic stockpiles.
The scale of the shortfall was stark: Vietnam held only five to seven days of national reserves at the outbreak, with commercial inventories stretching supplies up to 65 more days. Thailand held about 61 days against a 25-day mandated minimum in early March, while the Philippines had 50-60 days in private inventories — all far below the International Energy Agency’s 90-day benchmark. A Philippine parliamentary panel has since approved a bill creating a 60-day government-held reserve.
Thai officials are advancing plans for cross-peninsula crude pipelines and tank farms, positioning against Singapore for Gulf crude storage, according to Ben Kiatkwankul of Maverick Consulting Group. India had roughly 74 days of oil stocks as of May, over 90 percent held by state-owned enterprises, per S&P Global.
In July, state-owned Oil and Natural Gas Corporation announced a new reserve of 1.75 million metric tonnes (13 million barrels) in the south, adding to plans to expand existing stockpiles by 6.5 million metric tonnes. Japan, South Korea, and Singapore are exploring expanded storage deals with Gulf suppliers, said Clara Gillispie of the Council on Foreign Relations. The UAE’s ADNOC already stores oil in Singapore, India, South Korea, and Japan; Kuwait and Saudi Arabia hold stockpiles in South Korea and Japan.
ADNOC aims to raise crude storage capacity in India to 30 million barrels, while New Delhi is considering storing reserves at the UAE port of Fujairah. South Korean media report Seoul may expand its 146 million barrels of reserves by 30-40 million barrels, up from an initial 20 million plan. In China, the blockage reinforced investment in energy security, said David Fishman of the Lantau Group; Beijing’s five-year plan for 2026-2030 includes more pipelines and expanded LNG storage.
Watch next for whether the Gulf suppliers’ storage-for-supply deals with Asian buyers harden into long-term contracts as the strait remains contested.
