Private-Sector Team Studies ASEAN Regional Oil Storage at 22% Lower Cost

Key Facts

ERIA and the Indonesian Business Council in Jakarta launched a private-sector working group to explore a pilot project for regional oil storage within ASEAN, in a move aimed at strengthening supply security and emergency preparedness. ERIA said the group held its inaugural meeting on 3 September 2026. The team is examining a practical project design, a business model and implementation arrangements, with participation from governments, national oil companies, storage operators, investors and the private sector. The start of the study does not mean governments have agreed to establish a shared reserve or approved a timetable for its operation. Current work is focused on identifying how regional cooperation on oil storage could work before any implementation commitment.

The initiative comes amid broader regional discussions on oil preparedness. The International Energy Agency and Thailand's Ministry of Energy, with support from the Japanese government, held a workshop in Bangkok on 14 and 15 October 2026 to discuss supply security, emergency preparedness and the potential development of emergency stocks in Southeast Asia. The workshop brought together more than 40 representatives from the governments of nine ASEAN countries, as well as IEA member countries and regional organizations. The agency said Indonesia, Malaysia, the Philippines and Thailand had shown serious interest in strengthening emergency stockholding arrangements. That interest points to a widening discussion among countries, but does not establish a common decision on the form or ownership of the stocks.

ERIA estimates offer a potential economic incentive for cooperation, putting the annual cost of holding additional stocks at about $2.19 billion under a collaborative approach, compared with $2.80 billion if each country led the arrangement on its own. The difference amounts to a reduction of about 22% for the same volume of additional reserves. But these figures are research estimates, not an approved budget or a commitment by ASEAN governments. The modeling assumes stocks remain owned by producers or partners, while participating countries receive agreed access rights. The cost estimates also exclude emergency delivery and replenishment of stocks after use.

The need for such arrangements reflects varying levels of national preparedness; ERIA says many ASEAN countries rely mainly on commercial stocks or are still developing national frameworks. The IEA sees the region's crude oil import needs approaching 3 million barrels per day by 2031, while net imports of petroleum products could rise to about 2.2 million barrels per day. The agency identifies the Strait of Hormuz and the Strait of Malacca as maritime chokepoints, warning that a supply disruption through either could quickly affect oil availability, freight and product prices, inflation and public finances. Before the crisis, Southeast Asia's imports relied on the Middle East for about 60% of crude and a third of gas, while 45% of petroleum product supplies were linked to crude from the region. The agency says strategic storage systems could combine government stocks, central agencies and industry obligations, with the appropriate model varying from country to country.

Potential cooperation builds on the ASEAN Petroleum Security Agreement, which provides a basis for consultation, information sharing and voluntary commercial assistance when a country faces a severe shortage. The IEA says, however, that the agreement's practical application remains limited and recommends activating regional procedures and exercises. ERIA called in April for a shift from analysis to coordinated, scalable storage arrangements, including public-private partnerships, commercial obligations and complementary national stocks. It also said large-scale infrastructure needs a diversified financing strategy that could combine public resources, private investment and support from development finance institutions. These remain research pathways and recommendations, not commitments approved by ASEAN countries.

The Philippines is pursuing a separate national reserve alongside any regional arrangement, with the national oil company beginning site preparation in Bataan for the country's first strategic reserve. The energy secretary said the goal is to make the first tank, with a capacity of one million barrels, available by the end of 2027. The energy official said the Philippines has no surplus fuel to offer during crises, but could host regional storage facilities by providing land for tanks near Southeast Asian capitals. This national effort highlights the potential for different forms of participation in regional initiatives, from supplying fuel to providing storage sites. The proposed ASEAN project remains at the exploratory stage, while turning it into a practical arrangement would require defining its business model, financing, implementation and stock access rights.