ASEAN’s energy resilience ambitions face implementation tests amid Hormuz disruption

Strait of Hormuz disruptions have reignited discussions among Southeast Asian governments regarding the establishment of a joint strategic petroleum reserve under the ASEAN Petroleum Security Agreement in 2026, though experts caution that challenges related to financing, legal frameworks and national interests may prove more difficult to resolve than achieving political consensus.

In April and May, ASEAN energy ministers urged faster ratification of the bloc's petroleum security pact, which outlines voluntary, coordinated emergency measures, while Indonesia offered to host a regional oil storage hub and shared emergency reserve system.

Alfi Kurnianingsih, researcher at the Center for Policy Strategy on Energy and Mineral Resources of Indonesia's Ministry of Energy and Mineral Resources, told Platts, part of S&P Global Energy, that ASEAN energy ministers' call for the swift ratification of the renewed APSA reflects a critical paradigm shift toward strengthening regional energy security and emergency preparedness.

However, institutional reforms alone may not ensure effective implementation, Kurnianingsih said, noting that APSA's voluntary, non-binding nature has been a key reason the agreement was rarely activated in the past.

Michael Harrisson, partner at Baker Botts, said, "The challenge [of a joint strategic reserve] is where it is going to be and how it is going to be funded."

While such regional stockpiling is "easier in concept than the ASEAN Power Grid," Harrisson said, adding that both initiatives face the same tests: whether member states are willing to invest, align regulations and secure sufficient supply for regional energy security.

ASEAN countries could also face a challenge in maintaining momentum once the immediate supply shock fades, according to Harrisson. Without sustained political commitment and concrete implementation, countries could "watch [the initiative] wither on the vine," he said.

Bottlenecks

Unlike previous versions, the new agreement adopts a framework structure with detailed operating protocols. It also formally incorporates natural gas alongside crude oil as strategic energy commodities and establishes a permanent secretariat at the ASEAN Centre for Energy to coordinate emergency responses.

"Without a binding enforcement mechanism, member states can still prioritize unilateral domestic solutions during a crisis without formal accountability to the regional pact," Kurnianingsih said.

"Translating policy into action remains hindered by structural, legal and operational bottlenecks across the agreement's lifecycle," Kurnianingsih said.

Current national regulations also often conflict with regional mechanisms, according to Kurnianingsih, who noted that Indonesia's Energy Buffer Reserve framework, aimed for full implementation in 2035, is strictly mandated for domestic crises, meaning there is no mechanism for releasing sovereign reserves to neighboring ASEAN countries under APSA.

Additionally, Kurnianingsih highlighted that capital gaps in scaling regional infrastructure -- amid national budgetary constraints -- and the region's status as a net oil importer continue to pose operational and structural challenges.

"Major [participants] like Indonesia, which were net oil exporters when early security pacts were conceived, are now net importers due to declining domestic production and rising demand," Kurnianingsih said. "Anchor nations simply lack the physical surplus required to extend material aid to neighbors."

Regional cooperation

Regional cooperation is central to strengthening resilience, particularly in the power sector through the ASEAN Power Grid -- an initiative to unify the electricity networks of all 10 member countries of the bloc by 2045 -- the International Energy Agency said in its Southeast Asia Energy Outlook 2026 in June.

At the same time, existing regional frameworks, notably APSA, remain underutilized, reflecting challenges related to ratification, scope and operational readiness, the IEA said.

Southeast Asia meets just under 40% of its crude oil demand through domestic production, while the Middle East supplies about one-third of its demand, according to the IEA. Oil self-sufficiency varies widely, ranging from 0% in Singapore, a major refining hub, to 73% in Malaysia and 100% in Myanmar, the IEA said in the report.

Key fuel security indicators for Southeast Asian countries:

Source: IEA analysis

The IEA argued that the region's emergency responses during the conflict have been insufficient, calling for structural investments in storage, diversified crude supply chains, regional interconnections and domestic energy production to strengthen resilience against future disruptions.

"Enhancing resilience to fuel supply disruptions in Southeast Asia requires a system‐wide perspective that goes beyond volumes alone," the IEA said. "Supply‐side measures should complement other mitigation tools such as strategic stocks, emergency coordination mechanisms and demand‐side measures."

The agency said broader Asia-wide cooperation, such as Japan's $10 billion POWERR Asia framework -- a regional energy-security initiative launched in 2026 -- could further strengthen resilience by adding financial, institutional and infrastructure support that individual countries may not be able to mobilize alone.