Asian governments advance oil reserves and power plans after Iran war disruption

Japan and Southeast Asian partners announced plans on 8 October to strengthen oil reserves and regional electricity links as the Iran war disrupts energy supplies. The plans matter because the region relies heavily on imported fuel, but the proposed joint stockpiles and power connections have yet to be put in place.

Nine Southeast Asian nations, Japan and Australia backed the development of national oil-stockpiling systems and voluntary regional joint stockpiling in a statement reported by Reuters. The wording points to cooperation, rather than an agreed regional reserve with fixed volumes, locations or rules for releasing fuel.

What Japan and its partners agreed on oil reserves

Japan said it had agreed action plans with Asian partners to increase crude-oil reserves after a meeting of the Japan-led Asia Zero Emission Community, Reuters reported. Japanese State Minister of Economy, Trade and Industry Takagi Kei also said Saudi Arabia and the United Arab Emirates had expressed willingness to cooperate on strengthening Asia’s stockpiling capacity after a separate session.

The Philippines, which imports nearly all its oil and fuel, intends to create a national reserve by the end of 2027, Energy Secretary Sharon Garin said, according to Reuters. Garin said it could subsequently become a regional stockpile. That is a proposed next use for the reserve, rather than a regional arrangement already in operation.

Why Southeast Asia is seeking more fuel security

The International Energy Agency said in its 2026 Southeast Asia outlook that, before the crisis, around 60% of the region’s crude-oil imports and one-third of its gas imports came from the Middle East. It said 45% of oil-product supply depended on Middle Eastern crude. Disruption along concentrated supply routes therefore reaches beyond the price of crude itself.

The IEA said the disruption had affected refining, petrochemicals, power generation and cooking fuels. It identified shortages of naphtha, used in petrochemicals, and liquefied petroleum gas, a cooking fuel used by three-quarters of the region’s population. Some refineries are configured for Gulf crudes, limiting their ability to replace lost supplies readily.

The agency said coordinated fuel stockholding and emergency responses could improve collective security. It also identified cross-border power links as a way to balance electricity supply and integrate renewable generation. Those findings explain the appeal of the measures announced this week, although they do not establish that the proposed reserves or new links have been completed.

Renewable targets and the regional power grid

Southeast Asian countries also pledged to raise clean energy’s share of power generation, Reuters reported. Their stated targets are 30% renewables in total primary energy supply and 45% in installed power capacity. These measure different things: the first covers the region’s overall energy supply, while the second concerns its ability to generate electricity.

The gap between ambition and delivery remains substantial. Reuters reported figures from the ninth ASEAN energy outlook showing renewables at 14.1% of primary energy, below a previous 25% target for 2025. Green power stood at 33.7% of installed capacity against a previous 35% target. The newly stated goals therefore require progress beyond what earlier targets produced.

Countries reached an enhanced preliminary agreement on a regional power grid, Reuters reported. Garin called it a landmark accomplishment, but said an initial study pointing to connections by 2045 was being reviewed for faster implementation. A regional electricity network was first proposed in December 1997; the latest agreement advances planning, not a completed network.

The IEA estimated Southeast Asia’s renewable capacity at 120 gigawatts in 2024. Its outlook projected that capacity could nearly triple by 2035 under current policies, or grow fivefold if announced targets are achieved. Those are alternative projections, not additions already built. The immediate test for governments is whether reserve plans, host-country rules and grid agreements become funded projects with workable operating terms.