Asia looks to store oil, gas closer to home after Strait of Hormuz crisis Asian economies are racing to build up storage capacity to reduce their exposure to conflict in the Middle East. Asia suffered some of the worst economic fallout when the United States and Israel went to war with Iran six months ago.

The region is heavily reliant on Gulf oil and gas that normally flows through the Strait of Hormuz, where shipping has been reduced to a trickle by Iranian attacks and a US naval blockade. Recommended Storieslist of 4 items - list 1 of 4Russia, China leaders to meet at Shanghai Cooperation Organisation summit - list 2 of 4People return to their flood-ravaged homes in Nepal - list 3 of 4Global coral reef coverage risks irreversible decline, new report warns - list 4 of 4Djokovic suffers shock first round exit at US Open amid tears and pain Asian countries quickly imposed fuel conservation measures as oil and gas prices surged, ranging from price caps to alternate driving days and work-from-home mandates for civil servants.

In the months since, Asia has begun seeking a more permanent solution to the biggest energy disruption in history – keeping the oil and gas it needs much closer to home. “The crisis is producing two very different kinds of investment: infrastructure that bypasses geopolitical risk, and infrastructure that eliminates exposure to imported fuel altogether,” said Parul Bakshi, a visiting research fellow at the Oxford Institute for Energy Studies.

One of the most ambitious proposals to emerge from the crisis has come from Japan. Though highly dependent on Middle Eastern energy, Japan has weathered the crisis better than many other economies because it holds one of the world’s largest strategic oil reserves.

Tokyo wants its neighbours in Southeast Asia to follow its lead. In April, Japanese Prime Minister Sanae Takaichi announced the $10bn POWERR Asia initiative, aimed at helping Southeast Asian economies procure oil and petroleum products and, in the long-term, build up strategic stockpiles.

At the outbreak of the Iran war in late February, Vietnam only held enough oil in its national reserves to meet the country’s needs for five to seven days, according to state media, although commercial inventories and other sources extended supplies for up to another 65 days.

Thailand held about 61 days of reserves across the public and private sectors against a 25-day mandated minimum in early March, while the Philippines was estimated to have 50-60 days of supplies in private commercial inventories. All figures were below the International Energy Agency’s 90-day minimum benchmark.

In Bangkok and Manila, the war has revived a push to establish comprehensive state-held strategic oil reserves. Last month, a parliamentary panel in the Philippines approved a bill to create a 60-day government-held reserve. Thai officials are moving forward with plans for new “cross-peninsula crude pipelines and tank farms, positioning Thailand against Singapore for Gulf crude storage”, said Ben Kiatkwankul at Maverick Consulting Group, a Bangkok-based public affairs consultancy.

In South Asia, the war has also pushed India to rethink its strategic stockpile. India had about 74 days’ worth of oil stocks as of May, more than 90 percent of which was held by state-owned enterprises, according to S&P Global. In July, India’s state-owned Oil and Natural Gas Corporation announced that it would build a reserve of 1.

75 million metric tonnes, or 13 million barrels, in the country’s south, adding to the company’s plans to expand existing stockpiles by 6.5 million metric tonnes. Asia’s biggest economies, meanwhile, have been exploring storage deals directly with Gulf suppliers.

“Japan, South Korea, and Singapore have longstanding relationships and partnerships with a number of Middle Eastern countries to locate storage supplies closer to their shores,” said Clara Gillispie, a senior fellow for climate and energy at the Council on Foreign Relations.

“For each of those three, we’ve heard some interest in expanding the existing capacity, as well as potentially signing new understandings,” Gillispie said. “There’s also been conversations touching upon expanded relationships with India.” The United Arab Emirates and its Abu Dhabi National Oil Company (ADNOC) already store oil in Singapore, India, South Korea, and Japan, while Kuwait and Saudi Arabia also have stockpiles in South Korea and Japan, according to the Observer Research Foundation, a public policy think tank based in New Delhi.

ADNOC is aiming to raise its crude oil storage capacity in India to 30 million barrels, while New Delhi is considering a proposal to store some of its strategic reserves at the UAE port of Fujairah on the Gulf of Oman, beyond the Strait of Hormuz bottleneck.

South Korean media have reported that Seoul is mulling whether to expand its oil reserves of some 146 million barrels by an additional 30-40 million barrels, up from initial plans for an extra 20 million barrels. In China, the world’s second-biggest consumer of oil after the United States, the blockage of the Strait of Hormuz has reinforced a belief that the country must invest in its energy security, said David Fishman, a Chinese energy policy expert at the Hong Kong-based Lantau Group.

Beijing’s latest five-year plan (FYP) for oil and gas development, which sets policy for 2026 to 2030, included provisions for more pipelines and expanded LNG storage, among other measures such as expanded deep-water drilling. State-owned pipeline operator PipeChina said in May that it was accelerating construction on some of its nearly 40 oil and gas projects, including 9,000 kilometres (5,590 miles) of domestic pipeline.

While these plans were drafted before the Iran war began, Fishman said the conflict has reinforced the rationale for such investments. “So, while Hormuz couldn’t have been the direct driver of this language appearing in the 15th FYP drafts, it certainly underlines for policymakers that this line of thinking is clearly correct, and their assumptions about chronic instability are well-founded,” Fishman said.

“Whatever internal uncertainty there might have been around the costs or effort associated with building up potentially superfluous national energy reserves will certainly have evaporated,” he said. Oxford’s Bakshi said the common thread across the region is reducing exposure to a “single fuel, supplier or chokepoint”.

“It is no longer enough to ask where the next barrel comes from,” Bakshi said. “We also have to ask how it gets there, how long we can operate without it, and whether we can reduce our need for that barrel altogether.

UN Secretary-General Antonio Guterres urged the US and Iran to resume diplomatic talks following reported renewed strikes, expressing concern over unverified accounts of civilian casualties, including an alleged attack on a wedding ceremony in Iran.

His spokesperson stated that the UN chief condemned all reported attacks on civilians and emphasized the need for compliance with international humanitarian law principles.

The sudden recent escalation of the Iran war has cast renewed attention on its civilian toll after Iran reported 18 dead in the last U.S. assault, including four killed and dozens wounded at a wedding. Iran’s health minister said 18 people were killed and 108 wounded in Tuesday night’s U.

S. strikes across Iran. The Iranian Red Crescent said four people were killed and 67 wounded at a wedding ceremony near the coast of the Strait of Hormuz. The return of combat operations has alarmed countries throughout the region, as Iran launched missile and drone attacks against what it said were U.

S. assets in Bahrain, Jordan, Kuwait and Iraq. The guns had largely gone silent since the previous exchange in July, although peace talks failed to advance in the interim. President Donald Trump threatened to unleash yet more military force, even though the war is unpopular at home and has driven up the cost of gasoline.

Iran, for its part, has remained defiant, despite suffering heavy military and economic losses. United Nations Secretary-General Antonio Guterres was “deeply alarmed by reports of civilian casualties, including a strike that reportedly hit a wedding ceremony in Iran,” and called for an immediate cessation of military action, his spokesperson Stephane Dujarric said.

“The Secretary General condemns all attacks against civilians. He recalls that all parties must respect their obligations under international humanitarian law, including the principles of distinction, proportionality, and precaution,” Dujarric said.

The deaths would be in addition to the 3,636 people documented as killed in Iran as of April 7, including 1,701 civilians, according to the Human Rights Activists News Agency (HRANA), an independent Iranian rights group. The U.S. has reported 18 military personnel killed and more than 750 wounded.

“We are aware of reports, which originated from Iranian state media. The U.S. military never targets civilians, unlike the IRGC,” U.S. Navy Captain Tim Hawkins, a spokesperson for the U.S. military’s Central Command, said in an email. The Iranian Red Crescent Society released video showing debris strewn on the ground next to a building with a large hole in the roof, accompanied by still images showing people, some in Red Crescent vests, at a damaged building and a utility tower lying on the ground.

Reuters was able to verify the location using satellite imagery, which showed the fallen tower was 136 metres (149 yards) from the damaged building. The wedding incident recalled the blast at a school in Minab that killed 160 people at a girls’ school on the first day of the war.

The Pentagon has yet to issue an official finding on the Minab strike, which would be the U.S. military’s largest civilian casualty incident in decades. It may have been the result of U.S. use of outdated targeting data, two sources familiar with the matter told Reuters.

Democratic members of the U.S. Congress have called on the administration to release findings of its investigation of the incident, but the report has not been sent to lawmakers. RELATED U.S. defenders of the Iran war also point to civilian deaths that resulted from Iranian attempts to put down street protests that embroiled the country in December and January, before the U.

S. and Israel attacked Iran on February 28. HRANA has put that death toll at more than 7,000, while Iranian exile groups claim the number is much higher. Trump has cited an incentive for Iranians to overthrow their government as one reason for the war, in addition to seeking to halt Iran’s nuclear program and ending its support for militant groups abroad such as Hamas, Hezbollah and the Houthis.

Iran has also responded to the U.S. attacks by threatening any oil tankers that transit the Strait of Hormuz without Iranian authorization, severely curtailing traffic in a waterway that before the war carried 20% of the world’s oil supply.

US Treasury Secretary Scott Bessent stated that recent Ukrainian long-range drone strikes on Russian energy infrastructure are contributing to a global "energy shock" and increased prices, a view supported by Kpler data showing refinery runs fell to roughly 3.

8 million barrels per day in July. These disruptions have coincided with existing market strains, with Bessent also citing impacts from the conflict involving Iran.