Introduction
Six months after the United States and Israel went to war with Iran, shipping through the Strait of Hormuz is still a trickle. Asia has felt it more than anywhere else: roughly 80% of the oil that moved through the strait in 2025 was headed for Asian buyers. The first response was rationing, price caps and work-from-home orders. The second, now under way, is longer term. Governments are building storage at home and looking for storage that sits outside the chokepoint altogether.
A region running on thin buffers
Brent crude was trading near US$97 a barrel in early September, and a Reuters poll of analysts lifted its average 2026 forecast to about US$89. The price is only part of the problem. The war showed how little cushion many Asian importers had.
| Economy | Reported cover at or after the outbreak |
|---|---|
| Vietnam | 5–7 days in national reserves (commercial stocks extended this) |
| Philippines | 50–60 days, held in private commercial inventories |
| Thailand | About 61 days across public and private stocks (25-day legal minimum) |
| India | About 74 days as of May, over 90% held by state-owned firms |
| IEA benchmark | 90 days of net imports |
Japan came through better than most because it holds one of the world’s largest strategic oil reserves. South Korea, with about 146 million barrels, was also better placed.
Who is building what
The plans vary in size, but the direction is the same across the region.
- Japan announced the US$10bn POWERR Asia initiative in April. It helps Southeast Asian economies buy oil and products now and build their own stockpiles over time.
- India’s ONGC said in July it would build a 1.75 million tonne (about 13 million barrel) reserve in the south. New Delhi is also considering keeping some strategic crude at Fujairah in the UAE, which lies outside the strait. Separately, ADNOC wants to raise its crude storage in India to 30 million barrels.
- South Korea is reported to be weighing an extra 30–40 million barrels, up from an earlier plan for 20 million.
- China’s five-year oil and gas plan for 2026–2030 calls for more pipelines and LNG storage. PipeChina has accelerated work on nearly 40 projects, including 9,000km of domestic pipeline.
- The Philippines, the first country to declare a national energy emergency after the closure, saw a congressional panel approve a bill for a 60-day government-held reserve in August.
- Thailand is studying cross-peninsula crude pipelines and tank farms that would compete with Singapore for Gulf crude storage.
What it means for business
The stockpiling drive is a multi-year spending cycle covering tank farms, pipelines and LNG terminals, and the engineering, financing and insurance behind them.
It also creates contracts that need careful drafting. Producer-held storage is already common: the UAE keeps crude in Singapore, India, South Korea and Japan. The terms that matter are who can draw on the oil in a crisis, how it is priced, and what counts as force majeure. Those details decide whether a reserve helps when the next disruption comes. Singapore, meanwhile, faces new competition for its storage business from Thai and Indian projects.
Parul Bakshi of the Oxford Institute for Energy Studies put it this way: “It is no longer enough to ask where the next barrel comes from. 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.”
Summary
The Hormuz crisis has turned energy storage from a technical issue into a national security priority across Asia. Japan, India, South Korea and China are expanding reserves. Southeast Asian countries, starting from low levels, are trying to catch up, some with Japanese help. The result will be years of investment in storage infrastructure and more sovereign storage agreements with Gulf producers. Businesses that build, finance, insure or draft these deals should expect steady demand.
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