Japan has pledged $10bn (£7.4bn) to support Asian countries grappling with energy supply disruptions caused by the Iran crisis, with a focus on Southeast Asia’s growing vulnerability to oil shortages.
Prime Minister Sanae Takaichi announced the funding on Wednesday following a virtual meeting with regional leaders, unveiling a cooperation framework aimed at strengthening energy security across Asia.
The initiative will support countries in procuring crude oil and petroleum products, maintaining supply chains and expanding emergency stockpiles, as the region faces significant risks from disruptions in the Strait of Hormuz.
“Japan is closely interconnected with each Asian country through supply chains and mutually dependent with them,” Takaichi said during a press briefing.
Asia remains heavily exposed to supply shocks, with nearly 90% of oil and gas transported through the Strait of Hormuz destined for the region.
According to Japan’s foreign ministry, the $10bn package is roughly equivalent to a year’s worth of crude oil imports for members of the Association of Southeast Asian Nations.
Leaders from countries including the Philippines, Malaysia, Singapore, Thailand, Vietnam, Bangladesh and South Korea welcomed the initiative during the meeting.
Funding will be sourced from multiple institutions, including the Japan Bank for International Cooperation, Nippon Export and Investment Insurance, the Japan International Cooperation Agency and the Asian Development Bank.
Takaichi said the programme would not compromise Japan’s domestic energy needs. As of the end of 2025, the country held oil reserves sufficient for 254 days of consumption, although authorities have begun drawing on these reserves in response to the crisis.
Japan released a record 50 days’ worth of oil last month and plans to release an additional 20 days’ supply in early May.
Concerns are also mounting over potential shortages of naphtha, a petrochemical derived from crude oil that is critical for manufacturing plastics used in medical supplies such as syringes, gloves and dialysis equipment.
Despite Takaichi’s reassurances that there will be no immediate disruptions, fears persist that shortages could place further strain on Japan’s healthcare system, already under pressure from an ageing population.
Across Southeast Asia, governments are responding to rising energy costs by urging conservation measures, including reduced air-conditioning use and carpooling. The Philippines has declared a national energy emergency.
At the same summit, Philippine President Ferdinand Marcos Jr called for stronger regional coordination.
“No single country in Asia can insulate itself from supply chain shocks of this scale by acting alone,” he said.
Faridah Abdulkadiri
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