ASEAN oil storage cooperation cuts estimated cost 22% to $2.19 billion
Key Facts
ERIA and the Indonesia Business Council began a study in Jakarta on September 3, 2026, into a pilot regional oil storage project in ASEAN, seeking to strengthen supply security through cooperation between countries and the private sector. ERIA said the working group would examine "a practical concept for a pilot project, a business model and implementation arrangements." The project is therefore at the exploratory stage of identifying a workable mechanism, while considering the roles of governments, national oil companies, storage operators, investors and other potential partners. The practical question is how to organize access to and delivery of oil when needed, alongside the cost of holding stocks. The study comes as contingency planning grows in importance for countries that rely on cross-border energy supplies.
ERIA modeling estimates the annual cost of holding an additional volume of stocks at $2.19 billion under a cooperative approach, compared with $2.80 billion if each country led the arrangement on its own. The difference is about 22% for the same additional volume, making shared storage arrangements a lower-cost option in the institute's comparison. But the estimate is not an approved budget or an agreement among ASEAN governments; it is a research recommendation on a possible form of cooperation. The figures also exclude the cost of delivering oil in emergencies and replenishing stocks after use. The model's viability remains tied to defining ownership, access and implementation arrangements, as well as expenses not included in the calculation.
Under the cooperative model described by ERIA, producers or partners retain ownership of the stocks, while participating countries receive access rights to be negotiated. The concept separates ownership of the oil from the right to use it, making the terms of access and delivery central to the project's design. This means that simply pooling stocks is not enough to determine how they would be used when supplies are disrupted; the model requires clear arrangements between owners and beneficiary countries. ERIA has not reported any binding agreement on those rights or government commitments to establish the stocks in the available information. The working group remains tasked with exploring the project concept, its business model and implementation arrangements.
The initiative is directly relevant to the region's exposure to external supply fluctuations. Before the Middle East crisis, about 60% of Southeast Asia's crude oil imports came from the region, while 45% of petroleum product supplies were linked to its crude, including refinery feedstocks and indirect trade in products. The International Energy Agency expects the region's crude import needs to approach 3 million barrels a day by 2031, while net petroleum product imports rise to about 2.2 million barrels a day. The agency also projects that the energy import bill could rise from more than $80 billion in 2024 to about $245 billion by 2035. It identifies the Strait of Hormuz and the Strait of Malacca as key transit routes for supplies, warning that disruption to either could quickly affect oil availability, shipping costs, product prices, inflation and public finances.
The regional discussion is moving in parallel with a meeting held by the International Energy Agency in Bangkok on October 14 and 15, 2026, attended by more than 40 representatives from governments of nine ASEAN countries, agency member countries and regional organizations. Participants discussed oil supply security and emergency preparedness, and the agency said Indonesia, Malaysia, the Philippines and Thailand were seriously considering strengthening emergency stockholding arrangements. The agency said participants agreed on the benefits of having emergency oil stocks. It announced that it would continue working with interested countries and regional partners to explore more targeted technical cooperation on storage and preparedness. This reflects a broader regional track than the working group launched by ERIA and the Indonesia Business Council, without establishing that a unified formula has been agreed.
Cooperation options draw on the ASEAN Petroleum Security Agreement, which allows for consultation, information sharing and voluntary commercial assistance if a country faces a severe shortage. The International Energy Agency says, however, that practical implementation of the agreement remains limited, and recommends activating its procedures, clarifying emergency steps, and regularly organizing workshops and simulation exercises. The agency says strategic storage systems can combine government stocks, central agencies and obligations imposed on the industry, with the appropriate model varying from country to country. These options give policymakers a broad range of choices for deciding how responsibility for stocks should be allocated and managed. The next step announced by the agency is to continue technical cooperation with interested countries and regional partners on storage and emergency preparedness.