HighIV Macro Policy & Sovereign Debt3 September 2026, Thursday
Hormuz crisis forces Asia to bring oil and LNG stocks closer to home; Vietnam's reserves had fallen to 5–7 days at the start of the war
South Korea is considering adding 30–40 million barrels to its 146 million barrel reserve, and the Philippines a 60-day state reserve. Japan's 10 billion dollar POWERR Asia programme aims to help South-East Asia build stocks. Subsidy budgets are running dry as Brent nears 100 dollars.
According to an Al Jazeera analysis dated 3 September, Vietnam had only 5–7 days of reserves when the US-Israel–Iran war broke out at the end of February; commercial stocks extended this to 65 days. Thailand held 61 days of stocks at the start of March and is planning crude oil pipelines and tank farms across the peninsula. In the Philippines, private stocks stand at 50–60 days, and a parliamentary committee approved a bill providing for a 60-day state reserve. South Korea is reportedly considering adding 30–40 million barrels to its 146 million barrel reserve. In April Japan announced the 10 billion dollar POWERR Asia initiative to help the region build stocks.
According to Fortune, more than 80% of the oil passing through Hormuz went to Asia before the crisis. Japan sourced 90% of its crude oil from the Middle East and proved more vulnerable than expected in LNG. According to Asia Times, as crude approaches 100 dollars a barrel, Goldman Sachs is warning of 120 dollars. India, Indonesia and the Philippines spent heavily earlier in the year defending their currencies and subsidising fuel prices, which has narrowed their fiscal room to absorb a new shock. A stronger dollar is also adding to imported inflation in the region.
Talay assessment
Bottom line
By exposing vulnerabilities such as Vietnam being caught with only 5–7 days of reserves at the start of the war, the Hormuz crisis is shifting Asian energy security policy from diversifying imports towards bringing stocks closer to home. Yet most plans are still at the assessment or bill stage, and fiscal space squeezed by subsidies limits the pace. The most likely path is gradual and uneven stock-building over several years; in the near term, such purchases can support prices by adding demand to a tight market.
Likely effects
- Asian energy securityPositive6 months+
South Korea's plan to expand its reserve, the Philippines' 60-day state reserve bill and Japan's POWERR Asia programme lengthen the region's ability to withstand future supply shocks.
- Oil and LNG pricesNegative1–6 months
With prices approaching 100 dollars, state buying to build stocks adds demand to an already tight market and may prolong upward pressure on oil and LNG prices.
- Asian public financesNegative1–6 months
India, Indonesia and the Philippines spent heavily early in the year defending currencies and subsidising fuel, leaving them squeezed between stockpile investment and subsidies; a strong dollar adds to imported inflation.
- Türkiye energy importsNegative1–6 months
More aggressive Asian bidding for spot LNG and crude cargoes raises import costs for Türkiye, which competes for the same cargoes, and complicates its winter supply-security planning.
Possibilities, ranked
- 1Gradual and uneven stock-building65%
Japan and South Korea act while fiscally constrained countries delay or scale down plans; regional resilience improves slowly.
Watch: South Korea's decision on expanding reserves and the Philippines' 60-day reserve bill becoming law
- 2Rapid, coordinated stockpiling20%
Japanese-financed storage projects in Southeast Asia accelerate and several countries buy simultaneously, pushing prices up in the near term.
Watch: Storage projects signed under POWERR Asia and state purchase tenders
- 3Plans shelved once the crisis passes15%
Hormuz flows normalise and prices fall; governments under fiscal pressure stop prioritising stockpile projects.
Watch: A sustained recovery in Hormuz transit counts and reserve bills dropping off parliamentary agendas
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.