Strategic oil storage plan aims to protect the Philippines from global price shocks.
MANILA: The Philippine government is seeking a partnership with the United Arab Emirates (UAE) to establish a strategic oil storage facility, with the aim of positioning the country as a regional energy hub and reducing its exposure to global price fluctuations.
Senate Energy Committee Chairperson Erwin Tulfo said discussions were held with Abu Dhabi National Oil Company (ADNOC) in Abu Dhabi on October 29, local media reported.
The proposed facility, following the signing of the UAE-Philippines Comprehensive Economic Partnership Agreement (CEPA) in June, would serve as a regional oil hub for ADNOC and form the foundation of a broader energy partnership.
The discussions covered crude oil supply, refinery investment, fuel retail networks, renewable energy and gas-to-power development.
Energy security
Tulfo said the proposed storage facility could strengthen the Philippines’ energy security and help shield consumers from volatility in international oil prices.
Both sides have set a tentative target of launching the project in the second quarter of 2027.
However, the timeline remains subject to agreements on the facility’s location, infrastructure responsibilities, commercial terms and implementation schedule.
The UAE delegation proposed sharing an existing storage-contract framework for the Philippines to review.
Tulfo said he would lead follow-up discussions to advance the initiative, while acknowledging that no formal agreement has been finalised.
The Philippine delegation included Ambassador to the UAE Alfonso Ver and Special Envoy for Trade and Investment Kathryna Yu-Pimentel.
They indicated that cooperation between the two governments, supported by private-sector participation, could help make the project viable.
The proposal comes as the Philippines remains heavily dependent on imported fuel and faces pressure from a weaker peso, fluctuations in global oil prices and potential supply disruptions.
A strategic oil reserve could provide the Philippines with a buffer during geopolitical tensions or supply-chain disruptions.
Separately, Saudi Aramco has reportedly held talks and preliminary discussions with the Department of Energy (DOE) and the Philippine National Oil Company (PNOC) about financing, building and operating a major commercial oil storage and export hub in Bataan.
On October 28, Philippine Energy Secretary Sharon Garin told Reuters that the country was also in discussions with Russia and the United States about storing oil in the Philippines. The move is intended to help the fuel-import-dependent nation hedge against price spikes linked to the Iran war.
The Philippines imports nearly all its energy requirements. It is also planning to increase diesel- and gas-fired power generation to offset an estimated 60 per cent decline in hydropower output and a 20 per cent drop in solar generation in the first half of 2027, due to the El Niño weather phenomenon.
Why it matters
The Philippines relies heavily on imported fuel, making it vulnerable to global price fluctuations and supply disruptions. A storage hub backed by the UAE could strengthen energy security and help cushion consumers from international oil price shocks.
However, the proposed project remains at the negotiation stage, with key commercial and infrastructure arrangements yet to be finalised.
What’s next
The next steps include a possible memorandum of understanding, selecting a site, reviewing ADNOC’s proposed storage-contract framework and clarifying financing arrangements.
The tentative second-quarter 2027 rollout target will depend on both sides reaching agreement on commercial terms and infrastructure responsibilities.
How it affects you
If completed and integrated into the supply chain, the facility could help reduce the risk of fuel shortages and provide a buffer against global supply disruptions.
However, any potential benefit to consumers will depend on the facility being completed, adequately stocked and operational. It is too early to determine whether the project would have a direct impact on pump prices.
