Japan pledges to supply crude oil to Vietnam’s Nghi Son refinery

Japanese Prime Minister and Liberal Democratic Party President Takaichi Sanae said at a meeting with Party General Secretary and State President To Lam on Saturday that Japan would launch the first project under the Partnership on Wide Energy and Resources Resilience Asia (POWERR ASIA) initiative by supporting crude oil procurement for the refinery to ensure it operates at full capacity.

The Japanese leader is on an official visit to Vietnam.

She arrived in Hanoi on Friday evening for a three-day official visit at the invitation of Vietnamese Prime Minister Le Minh Hung, marking her first trip to the Southeast Asian country since taking office last October.

The POWERR ASIA initiative, designed to enhance energy independence and resource security across the region, was proposed by Japan at the Asia Zero Emission Community (AZEC) Plus Online Summit in mid-April.

At the meeting, PM Takaichi emphasized the importance of Vietnam-Japan economic cooperation to ensure economic security, contributing to stronger strategic autonomy and resilience for both countries.

She called for closer coordination in such strategic sectors as semiconductors, high technology, digital transformation, green transition, public-private partnerships in strengthening energy and mineral supply chains, AI and space, as well as the rollout of projects under the POWERR ASIA initiative.

Also, at a joint press briefing following official talks in Hanoi between Vietnamese Prime Minister Le Minh Hung and his Japanese counterpart, the Vietnamese government leader affirmed that both countries had agreed to deepen cooperation in economic security, energy security, and sustainable agriculture.

He highlighted that both sides agreed to soon implement cooperative projects under the POWERR ASIA initiative.

Accordingly, Japan will assist in arranging crude oil supplies for the Nghi Son Refinery and Petrochemical Complex.

Japanese PM Takaichi echoed the importance of economic security as a new priority in bilateral relations.

She noted that both sides had agreed to strengthen coordination in securing stable supplies of critical minerals and reinforcing supply chains, particularly in strategic sectors.

Japanese petroleum company Idemitsu Kosan plans to supply Vietnam with about four million barrels of crude oil procured through routes that do not transit the Strait of Hormuz, Nikkei Asia reported on April 28.

The crude oil shipments will be refined into fuels and materials for plastics production.

Vietnam is playing an increasingly significant role in the supply chain for plastic products exported to Japan, including components used in automobiles, household appliances, and consumer goods.

Idemitsu Kosan is a major stakeholder in the Nghi Son refinery, located in Thanh Hoa Province, north-central Vietnam.

The refinery accounts for roughly 30-40 percent of Vietnam’s domestic petroleum supply.

According to the refinery’s operator, recent diplomatic efforts and proactive sourcing strategies have secured sufficient crude oil supplies to maintain operations through the end of May.

Targeting $60bn in bilateral trade

Vietnamese PM Hung announced that during the visit of Japanese PM Takaichi, the two sides had signed a series of significant cooperation agreements spanning space technology, information and communications, irrigation, climate-resilient infrastructure development, and carbon emissions reduction.

Both countries reaffirmed their commitment to strengthening political trust by expanding substantive cooperation in defense, security, and diplomacy.

“Vietnam and Japan are committed to enhancing economic cooperation, including economic security, energy security, and sustainable agriculture,” PM Hung stated.

The two sides reached a consensus on measures to raise Japanese investment in Vietnam to US$5 billion annually and to increase bilateral trade turnover to $60 billion by 2030.

The two nations will focus on expanding market access, strengthening official development assistance (ODA) cooperation, and ensuring economic, energy, and food security.