Japan May Extend $10 Billion to Southeast Asia to Help Buy Oil
(Bloomberg) -- Japan plans to provide as much as $10 billion in financial support to nations in Southeast Asia to help them cope with soaring crude oil prices due to the war in the Middle East, according to local media reports.
Japanese Prime Minister Sanae Takaichi is expected to announce the aid, which may include loans, during a virtual meeting with regional leaders set for Wednesday afternoon, public broadcaster NHK said. Kyodo News and the Yomiuri newspaper reported similar.
Japan imports petroleum-related products used in medical settings from Southeast Asia and there are concerns some countries’ low oil reserves could disrupt supplies, according to the reports.
The prime minister’s office wasn’t immediately available for a request for comment.
Chief Cabinet Secretary Minoru Kihara said at a media briefing earlier Wednesday that Japan is “considering mutual cooperation with Asian countries from the perspective of securing the supply of products made from petroleum products and strengthening the supply chain.”
Should procurement be disrupted, it could have a negative impact on Japan’s healthcare system, according to the local media reports. The country plans to provide financial support via the government-backed Japan Bank for International Cooperation, Kyodo said, citing unnamed government officials.
Southeast Asian nations including Vietnam have previously sought help from Japan, as well as from South Korea, for crude oil supplies. Japan has tapped on its strategic reserves in two tranches since the Iran war began some six weeks ago, but has said its own stockpiles are meant for domestic refiners and not for foreign nations.
Japan itself isn’t facing an immediate oil shortage. The trade ministry said the country can secure sufficient crude supply for this year by sourcing alternatives to the Strait of Hormuz, where transit remains constrained, and by drawing on its substantial oil reserves.
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