Japan has unveiled a major $10 billion initiative to support Asian nations grappling with severe energy disruptions caused by the ongoing conflict in Iran. Announced by Prime Minister Sanae Takaichi on Wednesday, the financial package aims to help neighboring countries secure crude oil and petroleum products, maintain critical supply chains, and expand strategic stockpiles.
"Japan is closely interconnected with each Asian country through supply chains and mutually dependent with them," Takaichi emphasized during a press briefing following an online summit with regional leaders.
The commitment, equivalent to roughly one year's worth of crude oil imports for the Association of Southeast Asian Nations (Asean), was welcomed by officials from the Philippines, Malaysia, Singapore, Thailand, Vietnam, Bangladesh, and South Korea. Funding will be channeled through state-backed institutions including the Japan Bank for International Cooperation, Nippon Export and Investment Insurance, the Japan International Cooperation Agency, and the Asian Development Bank.
Asia's vulnerability to energy shocks is particularly acute, with nearly 90% of the oil and gas traversing the Strait of Hormuz—a key waterway currently affected by blockades—destined for the region. The crisis has already triggered widespread responses: several Southeast Asian governments are urging citizens to carpool and reduce air-conditioning use, while the Philippines has declared a national energy emergency.
Philippine President Ferdinand Marcos Jr. echoed the urgency at the same summit, calling for Asean to activate its regional fuel-sharing pact. "No single country in Asia can insulate itself from supply chain shocks of this scale by acting alone," he stated.
Japan, which relies heavily on Southeast Asia for petroleum-derived products like medical equipment, assures that the aid will not compromise its domestic oil supplies. The country recently tapped into its reserves, releasing a record 50 days' worth of oil last month and planning an additional 20-day release in early May. As of late 2025, Japan's reserves held enough oil for 254 days of domestic consumption.
However, concerns persist over potential shortages of naphtha, a crude oil derivative essential for manufacturing plastics used in critical medical supplies such as syringes, gloves, and dialysis equipment. While Takaichi has urged calm, noting no immediate disruptions, fears linger that naphtha scarcity could further strain healthcare systems across the region, already burdened by ageing populations and soaring energy costs.