Japan Announces $10 Billion Aid Package to Address Asian Energy Crisis

Kathmandu. Japan has announced a $10 billion financial aid package to support Asian nations facing a fuel crisis. This move follows global energy supply disruptions caused by the conflict involving the US, Israel, and Iran.

Japanese Prime Minister Sanae Takaichi unveiled the new cooperation framework following a virtual meeting with Asian leaders on Wednesday. She emphasized the deep interdependence among Asian nations through supply chains. 

The plan aims to ensure the supply of crude oil and petroleum products, increase storage capacity, and strengthen supply systems. Countries within ASEAN, particularly the Philippines, Malaysia, Singapore, Thailand, and Vietnam, are expected to benefit. Leaders from Bangladesh and South Korea have also welcomed the initiative. 

The primary cause of the energy crisis is the instability in the Strait of Hormuz, which accounts for 20 percent of global oil supply, with approximately 90 percent of that oil destined for Asia.

Funding for this project will be mobilized through institutions such as the Japan Bank for International Cooperation, the Japan International Cooperation Agency, and the Asian Development Bank. Japan is also releasing oil from its own reserves.

By the end of 2025, Japan held oil reserves sufficient for 254 days, but due to the current crisis, oil is being drawn from strategic reserves.