Asia looks to store oil, gas closer to home after Strait of Hormuz crisis
Summary
Asia faced severe economic problems after the war between the United States, Israel, and Iran disrupted oil and gas flows through the Strait of Hormuz. In response, Asian countries are working to store more oil and gas closer to home to reduce their dependence on imports from the Middle East.Key Facts
- The war involving the US, Israel, and Iran caused major disruptions in oil and gas shipping through the Strait of Hormuz, heavily affecting Asia.
- Asian countries imposed fuel-saving rules like price caps and alternate driving days after energy prices climbed sharply.
- Japan, with one of the world’s largest strategic oil reserves, launched a $10 billion plan in April to help Southeast Asia build up its own oil stockpiles.
- Vietnam’s oil reserves at the start of the war could cover only about 5-7 days of national needs, with commercial stocks extending it somewhat.
- Thailand and the Philippines have less than the International Energy Agency’s recommended 90-day oil reserve minimum, leading them to push for larger official reserves.
- Thailand is planning new pipelines and storage facilities to increase its oil holding capacity and compete with Singapore for crude storage.
- India holds about 74 days of oil reserves and plans to expand its storage, including building a large new reserve in the south of the country.
- Major Asian economies, including Japan, South Korea, and Singapore, are seeking storage deals directly with Middle Eastern oil suppliers to keep supplies nearer to their shores.
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