Japan has rolled out a plan to establish a financial framework worth about $10 billion, aiming to secure energy stability for Asian countries in the wake of the Middle Eastern crisis.
The announcement comes as the world is reeling from energy shocks, disrupted supply chains and surging oil prices driven by US-Iran conflict.
The Japanese government will provide support through state-backed financial entities like the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI).
According to Prime Minister Sanae Takaichi who was speaking after a meeting of the “AZEC Plus” under the Asia Zero-Emission Community (AZEC), the support will be equivalent to around one year of crude oil imports by ASEAN, covering as much as 1.2 billion barrels of oil.
“We are closely interconnected with Asian countries through supply chains and other channels, and we are mutually dependent,” Takaichi told reporters.
As per PM, the initiative will help the countries, hindered by the lack of funding and credit, to procure crude oil.
“Supporting Asian countries’ supply chains would in turn bolster Japan’s own economy,” Takaichi added.
The government also plans to release another 36 million barrels from its national oil reserves from early May.
Southeast Asia’s relatively small oil stockpiles have caused a tightening of crude and petroleum product supplies, especially naphtha, which is essential for plastic production.
The regional supply disruption is causing concern for the Japanese healthcare sector, which heavily relies on Asia for medical supplies.
According to Japan’s Agency for Natural Resources and Energy, 90 percent of the crude oil passing through the Strait of Hormuz is bound for Asia, highlighting the vulnerability of the region.
