The Japanese government has decided to provide financial support totaling $10 billion (approximately 14.7 trillion won) to Southeast Asian countries facing difficulties in procuring crude oil due to the war in Iran.

This move is interpreted as Japan, which relies on Southeast Asia for the import of goods such as surgical gloves and IV bags made from naphtha as raw material, contributing to the stabilization of regional supply chains. This, in turn, aims to strengthen the foundation of Japan's foreign policy promoting a "Free and Open Indo-Pacific" (FOIP) and expand its regional influence.

On the afternoon of the 14th, Prime Minister Kono held an online "AZEC Plus Summit on Energy Resilience" (Asia Zero Emission Community Plus).

Along with leaders from existing AZEC partner countries, including Philippine President Ferdinand Marcos Jr., Malaysian Prime Minister Anwar Ibrahim, Singaporean Prime Minister Lawrence Wong, and Thai Prime Minister Anutin Charnvirakul, Korean Prime Minister Kim Min-seok also attended.

AZEC is a cooperative framework launched and led by Japan in 2023, with 11 countries currently participating. South Korea is not a member but was invited to the meeting.

Japanese Prime Minister Sanae Takaichi responding in the National Diet [Kyodo=Yonhap News]

This meeting was initiated and led by the Japanese government with the goal of cooperating with Asian countries amid growing concerns over supply chains for energy and key materials due to the Middle East situation.

After the meeting, Prime Minister Kono told reporters, "Our country (Japan) is closely connected with various Asian countries through supply chains and has a relationship of mutual dependence," and announced the launch of "Power Asia," a partnership to strengthen Asia's energy resource supply chains.

The core of this initiative is to pursue cooperation for structural responses, including cooperation on the construction and utilization of stockpiling tanks for the procurement and supply chain maintenance of crude oil and petroleum products within the region, securing critical minerals, and diversifying energy sources.

Furthermore, although it is difficult for the Japanese government to directly provide its own crude oil reserves to Southeast Asian countries, it plans to support these countries in securing crude oil through loans from the Japan Bank for International Cooperation (JBIC), a government-backed policy-based financial institution, and loan guarantees from the Nippon Export and Investment Insurance (NEXI).

The scale of financial cooperation through this initiative was presented as approximately $10 billion (about 14.7 trillion won).

Prime Minister Kono emphasized, "Supporting the strengthening of supply chains in various Asian countries through such cooperation also leads to the strengthening of the Japanese economy," adding, "This also realizes the 'Free and Open Indo-Pacific' that the Kono administration is advocating for."

Local media interpreted this meeting as having a significant aspect of preventing disruptions in the supply of key goods exported from these countries to Japan by financially supporting Southeast Asia's crude oil procurement.

This is because disruptions in the supply of naphtha, a raw material for various plastics, in Southeast Asia, which has insufficient crude oil reserves, are impacting Japan.

In fact, as the supply of medical gloves and tubes imported from Southeast Asia has become unstable, a sense of crisis has grown in Japan's medical field.

Meanwhile, the Asahi Shimbun reported that since the war in Iran, concerns about disruptions in the distribution of various goods based on crude oil have continued in Japan, and production disruptions across industries are also intensifying.

The Japan Paint Manufacturers Association stated that shipments of thinners, paints, and auxiliary materials made from petroleum have been halted, and some companies are feeling a sense of crisis in their operations.

However, the Japanese government maintains that while there are bottlenecks in the distribution process related to concerns about naphtha supply disruptions, the necessary quantities are being secured.