Japan is targeting Vietnam for what will be its first oil-sharing deal with a Southeast Asian nation as Tokyo attempts to ensure an uninterrupted supply of petroleum from overseas supply chains in the event of a disruption.
A government source told the Nikkei Asia that the deal is part of Japan’s effort to build oil-sharing arrangements with Associations of Southeast Asian Nation (ASEAN) members.
“Under one proposal, each participant would build up individual reserves of crude oil, along with gasoline, diesel fuel and other petroleum products, to prepare for disruptions in supplies,” reported the Nikkei.
“Both Japan and ASEAN countries rely heavily on Middle Eastern oil. But while Japan maintains a petroleum reserve that will cover domestic consumption for more than 200 days — a lesson from the 1970s energy crisis — some Southeast Asian nations are said to have only a month’s supply,” added the Nikkei.
More than 60% of crude shipments to Asia Pacific come from the Middle East, according to BP. The vulnerability of these flows to disruptions became apparent last month when a giant cargo ship became stuck in the Suez Canal disrupting supply chains.
Japan is also planning to hold talks with Indonesia, Thailand, Malaysia and other ASEAN countries to enter into similar cooperative agreements, said the Nikkei.
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