A Philippine government official revealed that two Gulf nations have offered to shoulder the costs of constructing oil depots in the country amid supply shocks due to threats in established maritime trade corridors such as the Strait of Hormuz.
Both the United Arab Emirates and Saudi Arabia expressed their willingness to completely fund these storage hubs in a separate project that could be seen as advantageous for a country like the Philippines that has suffered from supply disruption due to the geopolitical crisis in the Middle East.
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Gulf-funded storage hubs in Philippines
In a Philippine Senate committee hearing, Department of Energy Oil Industry Management Bureau Director Rino Abad said that the government’s treasury will not need to spend a single dime for the proposed projects.
However, Abad said that both proposed storage hubs will operate as foreign-owned commercial infrastructure on Philippine soil.
He stated that Saudi Arabia’s proposed hub has a target capacity of 50 million barrels. The Saudi government has also urged Philippine officials to provide an official concept to map out the next operational steps.
For this purpose, Abad said that the Philippine Strategic Petroleum Reserve, a newly created department under the DOE, will hold talks with Riyadh with regard to how the project will be implemented.
Meanwhile, a parallel project has been tabled by the UAE. Abad said they will formally approach Doha next for the proposal.
‘Reserve right’
Though both proposals would be favourable for the Philippines, Abad still highlighted the importance of the country being prioritised in the supply chain.
He said the country must have a “reserve right” with the petroleum products that will be stored in the depots to guarantee its supply stability during a crisis.
On top of these foreign-backed efforts, the official said that the Philippine National Oil Co. is also developing its separate energy project, specifically the construction of a strategic reserve in Bataan that is expected to host 15 million barrels a day. The project is expected to be completed by 2027.
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Elan Castanares 
KC Maderia 
Carmela Calling