MANILA: The Philippines signed on Saturday preliminary agreements to begin exploring emergency oil access in Indonesia and Thailand, initiatives aimed at strengthening energy security against supply disruptions from the Middle East triggered by the US-Israeli war on Iran.

Philippine state-run oil and gas exploration firm PNOC-EC signed separate letters of intent with Indonesia’s Interport Mandiri Utama and the Shell Company of Thailand Limited on the sidelines of the ASEAN Business and Investment Summit, held ahead of the ASEAN Summit, which Manila will begin to host starting Sunday.

The projects will involve the Economic Research Institute for ASEAN and East Asia and the Indonesian Business Council as knowledge partners and are focused on “exploring possible areas of cooperation related to oil ticketing mechanisms,” ERIA said in a statement.

This includes the “potential use of existing oil storage facilities in Indonesia and Thailand to support oil supply security and emergency preparedness in the Philippines,” it added.

According to ERIA, an oil ticketing arrangement would allow a participating entity to pay for the right to access oil held in another country’s storage facilities in an emergency, thus reducing the need for governments to build new storage facilities and purchase additional oil stocks upfront.

Such a system has been adopted in the EU and elsewhere but will be the first of its kind in ASEAN. According to a report from Tokyo-based NIkkei business daily, Laos and East Timor are considering participating as well.

The Philippines, which imports 98 percent of its oil from the gulf, has been in a state of energy emergency since March. It was the first country to do so in response to the war on Iran, which drove up local fuel prices significantly.

President Ferdinand Marcos Jr. has since called for a regional study on joint oil stockpiling, as the 11-member Association of Southeast Asian Nations face “increasing exposure to oil supply disruptions amid geopolitical uncertainties and growing dependence on imported oil,” ERIA said.

Many Southeast Asian nations rely on the Middle East for crude oil imports and are lacking stockpiles, making them among the hardest hit.

Manila, as chair of ASEAN this year, has been leading talks to diversify its energy sources and deepen energy cooperation with other partners, as part of an effort to secure supply amid the global crisis sparked by the war in the Middle East.

The Philippine government has also been discussing the proposed Philippine Strategic Petroleum Reserve Act, a draft measure to establish its first state-owned oil reserve aimed at building energy resiliency and protecting consumers from global energy crunch.

Noel M. Baga, an energy lawyer and professor at the University of Philippines, said that focusing on building this reserve should be Manila’s priority, as such a facility will hold at least 60 days of fuel supply and the measure will also establish more oil refineries in the country.

“Only adequate oil storage facilities and oil refineries inside the Philippines itself can truly ensure the country’s energy security, reduce dependence on oil imports, and reduce oil prices,”  Baga told Arab News.

“Philippine energy independence is a must.”