Japan to coordinate on energy with Indonesia as Iran war disrupts supplies

Japan and Indonesia have agreed to step up coordination on energy security, Japanese Prime Minister Sanae Takaichi said on Tuesday, as the US-Israeli war on Iran squeezes oil and gas supplies vital to Asia.

"In light of the Iran situation, the strategic importance of resources and energy security is once again being recognised globally. Indonesia is a major resource-rich nation," Takaichi said alongside Indonesia's President Prabowo Subianto after they met for talks in Tokyo.

The summit comes amid mounting concern over the widening Middle East conflict, which has disrupted shipments of oil and gas through the key Strait of Hormuz.

Indonesia is the world's biggest exporter of thermal coal for power generation, supplying about half of global exports. It is also a major liquefied natural gas exporter, with roughly a quarter of its shipments bound for Japan.

Japan said on Friday it will allow utilities to increase the use of coal-fired power plants from next month to cushion any disruption to liquefied natural gas imports caused by the war in the Middle East.

Japan has also opened up its oil stockpiles, rolled out gasoline subsidies, and is seeking energy supplies beyond the Middle East.

Japan and Indonesia would "make their best efforts to convince all parties (in the Middle East) to de-escalate" the conflict, Prabowo said. He also invited "Japan’s participation" in the Indonesian economy, including in critical minerals, rare earths, industrialisation, and nuclear energy.

Neither leader gave details of how the two countries would coordinate in economic security.