Japan pledges $10bn energy support package to stabilise Asian oil supplies amid Iran war disruptions

Japan has pledged $10bn (£7.4bn) in financial support to help Asian countries, particularly in South East Asia, secure energy supplies including crude oil, as the region grapples with disruptions to global energy routes linked to the Iran war.

The announcement was made on Wednesday by Japanese Prime Minister Sanae Takaichi following an online meeting with regional leaders. The new cooperation framework is aimed at strengthening energy security across Asia by helping countries procure oil and petroleum products, while also supporting supply chains and expanding fuel reserves.

Japan’s move comes as concerns grow over the vulnerability of Asia’s energy imports, especially those passing through the Strait of Hormuz, a critical shipping route through which nearly 90% of oil and gas bound for Asia is transported. Any disruption to the passage has the potential to trigger sharp supply shortages and price spikes across the region.

Speaking at a press briefing, Takaichi stressed the deep economic interdependence between Japan and its neighbours. “Japan is closely interconnected with each Asian country through supply chains and mutually dependent with them,” she said, adding that stable regional energy flows were essential for economic security.

According to Japan’s foreign ministry, the $10bn package is roughly equivalent to one year of crude oil imports for ASEAN member states. Leaders from the Philippines, Malaysia, Singapore, Thailand, Vietnam, Bangladesh and South Korea reportedly welcomed the initiative during the summit.

Funding for the programme will be provided through a combination of state-backed institutions, including the Japan Bank for International Cooperation, Nippon Export and Investment Insurance, the Japan International Cooperation Agency, and the Asian Development Bank.

Officials said the initiative would focus on improving energy procurement systems, strengthening supply chain resilience, and boosting strategic oil stockpiles across participating countries.

Takaichi also sought to reassure domestic audiences that the plan would not compromise Japan’s own energy security. At the end of 2025, Japan held oil reserves sufficient for 254 days of domestic consumption, though recent global instability has increased pressure on those reserves.

Last month, Japan released a record 50 days’ worth of oil from its strategic stockpiles and has indicated it may release a further 20 days’ worth in early May if supply conditions worsen.

Concerns are also rising over potential shortages of naphtha, a key petrochemical derived from crude oil and widely used in manufacturing plastics and essential medical supplies such as syringes, gloves and dialysis equipment. Health facilities in Japan have warned that prolonged shortages could place additional strain on an already ageing healthcare system.

Across South East Asia, governments have been hit by rising energy prices and supply uncertainty, prompting measures such as calls for reduced electricity use and increased fuel conservation. The Philippines has declared a national energy emergency in response to mounting pressure on its energy system.

At the summit, Philippine President Ferdinand Marcos Jr urged ASEAN members to activate their fuel-sharing pact to help manage regional shortages and stabilise supplies during the ongoing crisis.