Vietnam Partners with Japan's JICA on Strategic Petroleum Reserve Study

The Japan International Cooperation Agency (JICA) is set to collaborate with Vietnam on a feasibility study to develop a strategic petroleum reserve system, a move designed to enhance the nation's energy security amid persistent geopolitical uncertainties affecting global markets.

The initiative was detailed at a press briefing on June 26 by Okamura Kenji, Deputy Director General of the Energy and Mining Group at JICA's Infrastructure Management Department. He explained that the study comes as Vietnam's energy demand grows in tandem with its rapid economic expansion and increasing refining capacity.

Okamura noted that recent disruptions, such as those surrounding the Strait of Hormuz earlier this year, have underscored the critical need for stable energy supplies for nations across the ASEAN region.

"Preparing for emergencies during normal times is becoming more important than ever," Okamura said.

Experts from JICA and Vietnam will conduct a joint assessment of the country's current energy security posture, examining its institutional arrangements, infrastructure, and financial resources. The ultimate goal is to formulate a comprehensive roadmap for a resilient and sustainable oil stockpiling system.

The project stems from an agreement reached by the prime ministers of Vietnam and Japan in May. It also aligns with one of the four key pillars of cooperation announced during the recent visit of the JICA President to Vietnam, which emphasizes supporting the growth of domestic enterprises and their integration into global value chains.

Okamura stressed that energy security is a shared regional challenge that no single country can tackle alone. Both Japan and Vietnam are heavily dependent on crude oil imports from the Middle East, making them vulnerable to supply chain disruptions that would have broad consequences for regional industries and price stability.

"Strengthening crude oil stockpiling capacity and supply chain resilience across ASEAN, including Việt Nam, will directly contribute to regional stability and, in turn, Japan's own stability," he stated. "This is not one-way assistance but a joint effort to enhance the resilience of the entire region for our mutual benefit."

Japan's own history provides a valuable template. Following the oil shocks of the 1970s, the country developed a robust strategic petroleum reserve system with clearly delineated roles for the government and the private sector. JICA intends to share over five decades of experience in institutional design, operational mechanisms, crisis response, and human resource development.

"Our strength lies not only in supporting physical infrastructure but also in providing comprehensive assistance covering institutional design, operational systems, crisis management frameworks and capacity building," Okamura said. "JICA does not seek specific business opportunities. We want to accompany Việt Nam as a neutral partner to strengthen its own institutional and operational capabilities."

To facilitate the project, JICA will cooperate with Japanese entities like the Japan Organisation for Metals and Energy Security (JOGMEC) and key Vietnamese bodies, including the Ministry of Industry and Trade, the Ministry of Finance, and PetroVietnam.

Addressing the challenges, Okamura acknowledged that Vietnam's circumstances require a tailored approach distinct from Japan's model. Before the Strait of Hormuz crisis, Japan held strategic reserves equivalent to about 250 days of consumption, a figure that remained around 200 days even after two releases from the stockpile. In contrast, Vietnam's current capacity is considered relatively limited.

He said that determining an appropriate reserve level, a suitable stockpiling model, and the respective responsibilities of the government and private sector will depend on Vietnam's specific legal and policy framework. "The key issue is optimising institutional framework, infrastructure and financial resources for the oil stockpiling system," Okamura noted.

When asked about investing in petroleum reserves during a global shift toward cleaner energy, Okamura positioned energy security and the energy transition as complementary goals. While carbon neutrality is an inevitable trend for Vietnam to pursue, a stable energy supply is a prerequisite for a successful transition.

"Oil is not only used as fuel for automobiles but is also a vital raw material for producing a wide range of products that support economic activity," he told Việt Nam News. A strategic reserve, he added, would act as a safety net against supply shocks, creating the stability necessary for long-term investments in renewable energy.

Looking ahead, JICA is considering a variety of cooperation activities, including joint policy research, technical exchanges, study visits to Japan for Vietnamese experts, and specialized seminars. The agency may also consider providing Official Development Assistance (ODA) in the future to support the construction of oil storage infrastructure, such as strategic storage tanks.