As War Costs Surge, ASEAN Eyes Oil Reserve, Shared Grid

Southeast Asian nations hit by soaring fuel and food prices caused by the Middle East war are weighing solutions that include setting up a regional oil reserve, Philippine President Ferdinand Marcos said on Friday.

Leaders of the Association of Southeast Asian Nations (ASEAN) called for the opening of the Strait of Hormuz, while also debating a series of ambitious projects aimed at stemming the effects of the next global crisis. Marcos said all member states agreed on the need to act with speed, speaking to reporters hours after an overnight flare-up in the critical waterway.

“We needed it yesterday, if not sooner,” Marcos said of the raft of energy proposals. “That’s the way we are approaching the problem.” A closing statement called for the swift ratification of the bloc’s Framework Agreement on Petroleum Security, a fuel-sharing scheme aimed at ensuring energy stability.

Members also signed off on a push for an ASEAN Power Grid, aimed at connecting national electricity networks to enable cross-border power trading. Marcos said the idea was agreed unanimously, but conceded the devil was in the details.

“Let’s talk about the fuel reserve. Is it going to be in one single place? Is it going to be scattered throughout the whole of ASEAN?” he said.

 “Some countries have a surplus of a certain kind of fuel. Other people have a shortage,” Marcos said. “We’re trying to balance that out.” Singapore Prime Minister Lawrence Wong expressed support during a morning session for both the power grid and the fuel reserve concept, while warning that the effects of the strait’s closure would linger long after it was reopened. “It will take time—at least months for damaged infrastructure to be repaired, for the strait to be demined, and for goods to flow through,” he told ASEAN leaders.

The Philippines, which has seen its ships engage in repeated clashes with Chinese vessels in the disputed waterway, has previously said it wanted to complete the document.

However, talks have stalled repeatedly over disagreements on the code’s scope, enforcement and legal status. Asked Friday about the prospect of greater economic cooperation with China, Marcos said that largely hinged on finally completing a deal. “That is one of our aspirations as chair of ASEAN for 2026, that at the end of the year... we actually have a code of conduct.”