Indonesia has proposed hosting an ASEAN oil storage hub to strengthen regionalal fuel reserves as Southeast Asian countries discuss measures to improve energy security during ongoing Middle East tensions. The proposal was announced by Indonesia’s Energy Minister Bahlil Lahadalia on Monday (11/05).

Bahlil said no agreement has been reached regarding the location of the regional storage hub. Indonesia is seeking cooperation with Malaysiaia, Brunei, and the Philippines to support the proposal.

“We will build storage anywhere, but I proposed Indonesia,” Bahlil said, according to state news agency Antara.

ASEAN Discusses Shared Fuel Reserves During Cebu Summit

The proposal was linked to Bahlil’s visit to the Philippines with President Prabowo Subianto for the 48th ASEAN Summit in Cebu last week.

During the summit, ASEAN leaders discussed ideas including a regional fuel stockpile and a standby mechanism for food security. The discussions followed concerns over the closure of the Strait of Hormuz and possible future disruptions affecting fuel and fertiliser supplies in Southeast Asia.

Philippine President Ferdinand Marcos Jr. said ASEAN members were considering a shared mechanism for different fuel products among member countries.

“The situation right now is very different for each country. Some countries have a surplus of a certain kind of fuel. Other people have a shortage, and we’re trying to balance that out,” Marcos said after the summit last Friday.

He added that the mechanism would allow ASEAN countries to access emergency fuel supplies during crises affecting trade routes such as the Strait of Hormuz.

Indonesia Continues Domestic Oil Storage Development Plans

Separately, Bahlil announced plans for a domestic oil storage facility in a special economic zone in Sumatra to increase Indonesia’s national reserves.

He said the Sumatra project would continue even if Indonesia is not selected to host the ASEAN oil storage hub. The project remains in the feasibility study stage.

Earlier on Mar 4, Bahlil reportedly said the energy ministry had conducted a feasibility study for a strategic oil storage facility on Nipa Island in the Riau Islands. Construction is expected to begin this year.

According to Petromindo, Bahlil said the development plan had been reported to President Prabowo, who advised that the project should be implemented quickly.

“This is about survival. If we want energy security, we must address the core issues quickly so we do not remain dependent,” Bahlil said.

He added that investors had already been secured through domestic and international funding sources, excluding the United States.

Middle East Conflict Raises Concerns Over Global Energy Supplies

The discussions took place as the conflict involving Iran, the United States, and Israel entered its 11th week amid a fragile ceasefire and the continued closure of the Strait of Hormuz.

The Strait of Hormuz normally carries one-fifth of the world’s oil and gas supply.

Oil prices rose on Monday after US President Donald Trump said the ceasefire in Iran was on “life support” following Tehran’s response to a US proposal to end the war.

ASEAN leaders also discussed regional cross-border electricity connectivity and energy diversification during the summit.

PHOTO: MINISTRY OF ENERGY AND MINERAL RESOURCES  

This article was created with AI assistance.

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