Companies from the Philippines, Indonesia and Thailand signed agreements in Manila on Saturday to study how the Philippines could tap emergency stocks of petroleum products held in warehouses across Southeast Asia. The deals mark an early step toward a regional system that could help member states cushion oil supply shocks without building expensive domestic reserves from scratch.
The Philippine National Oil Company-Exploration Corporation, known as PNOC-EC, signed separate letters of intent with PT Interport Mandiri Utama of Indonesia and The Shell Company of Thailand. The signing took place during the ASEAN Business and Investment Summit in Manila, with the Economic Research Institute for ASEAN and East Asia and the Indonesian Business Council acting as knowledge partners.
How the arrangement would work
The proposed mechanism is an oil ticketing arrangement. Under such a system, a country or company pays for the right to draw on fuel stored in another country’s tanks during an emergency, subject to agreed conditions. The approach could allow the Philippines to use existing commercial storage across the region rather than financing its own large stockpiles upfront.
The letters of intent do not commit either side to specific volumes or trigger prices. Instead, they open a process to define the rules, pricing and logistics that would govern any future emergency drawdown. If the pilots succeed, they could become a template for similar agreements elsewhere in ASEAN.
Why the Philippines is looking abroad
The Philippines imports almost all of its crude oil, leaving it exposed when maritime routes or supplier contracts are disrupted. Thailand and Indonesia also rely heavily on imports, though both already have more developed storage and refining infrastructure. Sharing access to that infrastructure could improve security for all three countries while lowering the cost of holding spare stocks.
Southeast Asia as a whole depends on imports for roughly two-thirds of its crude oil needs, with much of that supply coming from the Middle East. Most ASEAN members keep only limited emergency stocks, so a coordinated regional approach has long been discussed among energy officials.
Political momentum from Manila
Philippine President Ferdinand Marcos Jr. has pushed for regional cooperation on oil stockpiling, building on an ERIA study that examined how ASEAN countries could pool reserves. The study found that shifting a larger share of stocks into jointly held reserves, combined with ticketing arrangements, could cut stockholding costs substantially compared with every country holding its own full buffer.
ERIA and the Indonesian Business Council have spent months facilitating dialogue among energy companies and governments. A high-level business roundtable in Singapore in July brought together the main stakeholders ahead of the Manila signing.
Still early days
The letters of intent are preliminary. Officials still need to settle how much oil would be available, who would pay for storage and transport, and under what circumstances a drawdown could be triggered. Legal frameworks, quality standards and cross-border logistics will also need to be aligned before the system can operate.
Even so, the Manila agreements signal that ASEAN members are moving from study to practical pilots on energy security. For the Philippines, securing emergency access to fuel in Indonesia and Thailand could provide an extra line of defense the next time global oil markets are disrupted.
