For a few months now, the economies of Southeast Asian nations have been affected by the higher costs of imported oil from the Middle East and there is no telling what evil the terrorist state of Iran could do with regards to the critical Strait of Hormuz. As such, the need for Southeast Asian nations to diversify their crude oil procurement sources is clear and Japan confirmed it will help them, according to a news article by Jiji Press with additional content from Manila Bulletin.
To put things in perspective, posted below is an excerpt from the news article of Jiji Press. Some parts in boldface…
The Japanese government plans to help Southeast Asian countries diversify their crude oil procurement sources, in order to stabilize petrochemical supply chains amid the ongoing Middle East tensions.
Faced with recent energy shocks following the effective closure of the Strait of Hormuz, Southeast Asian nations, which depend heavily on imported crude oil, are working to reduce their reliance on Middle East oil.
The Philippines has depended on the Middle East for more than 90 pct of its crude oil imports. In March, the Philippines declared a national energy emergency due to soaring crude oil prices.
The Southeast Asian nation recently started importing crude oil from Russia, even while some countries have reduced or halted imports from Russia as part of sanctions following its invasion of Ukraine. The Philippines has also shown a willingness to pursue joint oil and gas exploration with China in the South China Sea, where the two countries have territorial disputes.
Philippine President Ferdinand Marcos Jr. said in a recent interview, “I don’t think that we will go back to the old system where the majority of the petroleum products that are coming out of the Strait of Hormuz are going to Asia.”
Marcos expressed expectations that Asian countries will further advance the diversification of their crude oil supply sources in the coming years.
Other member states of the Association of Southeast Asian Nations, such as Thailand and Vietnam, are also seeking to diversify their procurement of crude oil by increasing imports from the United States and African countries, in addition to Russia.
At an ASEAN summit in Cebu in the Philippines earlier this month, leaders reaffirmed in a joint statement their commitment to diversifying crude oil procurement sources and promoting energy trade in the region. They also exchanged views on the idea of establishing joint oil and gas reserves.
Meanwhile, the Japanese government is wary of the potential impact on domestic supply chains if supply chains in Southeast Asia, a petrochemical manufacturing hub, are disrupted.
“Supporting supply chains in Asian countries will directly contribute to strengthening the Japanese economy,” Japanese Prime Minister Sanae Takaichi said, indicating her intention to support ASEAN.
In April, the Japanese government announced a framework to provide financial support of 10 billion dollars, or around 1.6 trillion yen, to help stabilize energy supplies in Asian countries.
Let me end this piece by asking you readers: What is your reaction to this development? Do you think Japan’s support for oil diversification in Southeast Asia is crucial for both itself and the region? Do you think Japan’s $10 billion plan will succeed in stabilizing the energy supplies of Asian nations? Do you think the Philippines will fall into an economic recession this year if the oil prices remained high? Do you think it is a wise idea for the Philippines to pursue a joint oil and gas exploration in the South China Sea with Communist China?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
+++++
Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @CarloCarrascoPH as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco
Author Carlo Carrasco 