Saudi Arabia and the United Arab Emirates, or UAE, have expressed their readiness to support Japan's plan to strengthen Southeast Asia's energy security, after the war with Iran disrupted oil supplies. Officials from both countries joined a special session of the Asia Zero Emission Community, or AZEC, in Manila in the Philippines yesterday, together with ministers from 11 member countries, including Japan, Indonesia and Australia, to discuss cooperation on oil procurement and strategic oil reserves. Japan is the country that initiated the AZEC framework, and Takagi Kei, deputy minister at Japan's Ministry of Economy, Trade and Industry, told reporters that the two Middle Eastern countries had expressed their readiness to cooperate in boosting Asia's oil reserve capacity, and that AZEC's ministerial action plan had been approved by member countries in order to increase oil reserve capacity and member states' ability to cope with the risk of supply disruptions. Back in April, Japan announced 10 billion dollars in financial assistance to Southeast Asian countries affected by soaring crude oil prices and oil supply problems, covering help with procurement, oil storage and emergency reserves. Before the war, Southeast Asia imported more than half of its crude oil from the Persian Gulf, while Japan imported about 90% of its oil from the Middle East, most of it shipped through the Strait of Hormuz. But as the situation escalated into a closure of the Strait of Hormuz, oil became severely scarce in the market, forcing some refineries to cut refining capacity, while governments in some countries had to ration fuel allocations and return to reviewing their energy security strategies.
Strait of Hormuz closure and disrupted Gulf oil supplies tighten global crude availability, supporting Brent prices.
War-driven closure of the Strait of Hormuz has made oil severely scarce, disrupting supply and supporting WTI prices.
