Emergency extinguisher full or empty? Crunch time for Asean’s fuel pact
This energy crisis will test whether the bloc’s emergency fuel-sharing pact is a gentleman’s agreement in disappearing ink
NOT long ago, the big story in South-east Asia’s cross-border energy space was on Singapore’s plan to import clean power from the region, including Cambodia via subsea cables. That is no longer the case.
As the Middle East crisis upends global energy markets, Cambodia is now scrambling for fuel from Malaysia and Singapore while supply tightens and export curbs bite.
This is precisely the kind of situation the Asean Petroleum Security Agreement (Apsa) was designed to address. Yet, there has been little public indication that the mechanism is being invoked – a telling detail in itself.
For four decades, Apsa has been the region’s “break-glass-in-case-of-emergency” fire extinguisher.
First signed in Manila in 1986, it was refined into a more operational framework in Cha-am, Thailand, in 2009. It expanded in 2025 in Kuala Lumpur to include liquefied natural gas (LNG) – a move that now appears prescient given the disruptions to Qatari exports through the Strait of Hormuz.
At its core, Apsa rests on a simple idea: In times of crisis, South-east Asian nations will voluntarily share up to 10 per cent of their fuel supplies with a neighbour in distress, on commercial terms.
The mechanism has never been tested. Recent disruptions, from the Covid-19 pandemic to the Russia-Ukraine war, were largely price shocks. No Asean member has so far faced a sustained volume shock of the scale that would trigger a coordinated response.
What South-east Asia faces today sits somewhere in between. It is a supply risk being priced in as a shock. A large share of global oil and LNG – particularly from Qatar – moves through the Strait of Hormuz. Impact is not contingent on halted flows; the threat alone can drive prices higher.
The risk is what comes next. As costs rise, governments move to conserve supply and tighten flows. That is when a price shock starts to become a volume problem.
Regional solidarity versus domestic pressures
In an over-US$100-a-barrel world, the bigger question is whether countries will prioritise a neighbour’s needs over domestic pressures. Can regional solidarity survive the squeeze of a tightening market, soaring fuel prices, public pain and mounting political pressures at home? The answer is obvious.
This dynamic extends beyond fuel. Even in food, Asean is struggling to present a unified front. Member states have yet to commit to lifting export restrictions, as governments prioritise domestic supply. Countries such as Vietnam and Thailand have moved to safeguard local availability, complicating regional coordination despite pledges to keep markets open.
These raise yet another uncomfortable question: If Asean cannot mobilise a coordinated response in a contained shock, what happens if the crisis deepens?
The harder truth is that Apsa assumes a level of coordination that may not exist in practice, whether in shared reserves, coordinated drawdown or rapid redistribution at a regional level.
That makes the current crisis a timely reality check for the 11-member bloc to understand what Apsa is, what it is not, and what it must become. In the process, the region may soon find out whether the emergency extinguisher is full or empty.
