Asia Pursues Strategic Energy Reserves and Regional Storage to Mitigate Supply Risks Post-Strait of Hormuz Crisis

Asia experienced significant economic disruption when the United States and Israel initiated military operations against Iran six months ago, underscoring the region’s vulnerability to energy market volatility.

The continent’s heavy reliance on Gulf oil and gas supplies—traditionally transported through the Strait of Hormuz—was severely hampered as Iranian attacks and a U.S. naval blockade reduced maritime traffic to minimal levels.

In response, Asian nations implemented emergency fuel conservation measures, including price caps, alternate driving schedules, and remote work mandates for government employees.

Currently, the region is pursuing long-term strategies to minimize dependence on imported energy by establishing strategic reserves closer to domestic markets and diversifying supply routes.

“The crisis has spurred dual investment priorities: building infrastructure to bypass geopolitical vulnerabilities and reducing reliance on imported fuels altogether,” explained Parul Bakshi, a visiting research fellow at the Oxford Institute for Energy Studies.

Japan has emerged as a leader with its $10 billion POWERR Asia initiative, launched in April to assist Southeast Asian nations in developing petroleum stockpiles and regional supply chains.

When hostilities erupted in late February, Vietnam’s national oil reserves lasted only five to seven days, though commercial inventories extended supplies to an additional 65 days. Thailand held roughly 61 days of reserves against a 25-day minimum requirement, while the Philippines maintained 50-60 days through private holdings—all below the International Energy Agency’s 90-day standard.

Thai authorities are advancing plans for cross-peninsula pipelines and storage facilities to position Thailand as a Gulf crude hub alongside Singapore, according to Ben Kiatkwankul of Maverick Consulting Group.

In South Asia, India is expanding its strategic reserves, with state-owned Oil and Natural Gas Corporation announcing a 1.75 million metric tonne (13 million barrel) facility in southern India and plans to increase existing stockpiles by 6.5 million metric tonnes.

Regional partnerships are also growing, with Japan, South Korea, and Singapore maintaining storage agreements with Middle Eastern suppliers. The UAE’s ADNOC already operates facilities in Singapore, India, and South Korea, while Saudi Arabia and Kuwait have similar holdings in East Asia.

South Korea is considering expanding its 146 million barrel reserve capacity by 30-40 million barrels, exceeding initial plans. Meanwhile, India is evaluating relocating some strategic reserves to Fujairah, UAE, beyond the Strait of Hormuz chokepoint.

In China, the blockade has reinforced its focus on energy security through its 2026-2030 five-year plan, which emphasizes pipeline expansion and LNG storage. PipeChina is accelerating nearly 40 projects, including a 9,000 km domestic pipeline network, as the conflict validates long-term infrastructure investments for energy resilience, according to David Fishman of the Lantau Group.

Oxford’s Bakshi emphasizes that reducing exposure to single supply points—whether fuel, sources, or transport routes—is now critical. “We must ask not just where the next barrel comes from, but how it travels, how long we can operate without it, and whether we can reduce our need for that barrel altogether,” she stated.

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