In a significant move to bolster regional stability and economic security, South Korea and Japan have committed to deepening their cooperation in energy and supply chains. This intensified collaboration, announced on 19th May 2026, comes as both nations grapple with the implications of the effective closure of the Strait of Hormuz.
The energy and supply chain cooperation was solidified during a meeting between South Korean President Lee Jae Myung and Japanese Prime Minister Sanae Takaichi in Andong, North Gyeongsang Province. This reciprocal visit, following Lee’s earlier trip to Takaichi’s hometown of Nara Prefecture, marks a historic first exchange of hometown visits between sitting leaders of the two nations. This gesture underscores a growing sense of trust and a strong personal rapport, elevating the practice of “shuttle diplomacy” between Seoul and Tokyo.
“At today’s summit, building on the trust developed through our shuttle diplomacy to date, Prime Minister Takaichi and I had candid discussions on a broad range of issues as strategic partners in jointly responding to the rapidly changing international environment,” South Korean President Lee stated during a joint press conference following the summit. This meeting occurs amidst heightened strategic pressures for both neighboring countries, whose relationship has historically been complicated by past disputes.
The recent conflict in the Middle East, leading to the effective closure of the Strait of Hormuz, has exposed a critical vulnerability for South Korea and Japan. As two of the world’s most energy-import-dependent major economies, disruptions to Middle Eastern energy flows pose a significant threat to their economic stability.
“In particular, we agreed that close bilateral cooperation is needed more than ever amid the instability in supply chains and energy markets arising from the recent situation in the Middle East,” South Korean President Lee informed reporters.
President Lee highlighted specific areas of energy and supply chain cooperation, stating, the two countries agreed to strengthen cooperation in the sectors of liquefied natural gas and crude oil, which are key energy sources. The leaders reached a consensus to expand bilateral LNG cooperation and enhance channels for information sharing and communication regarding crude oil supply and stockpiling.
This expanded LNG cooperation is built upon a memorandum of understanding signed in March between Korea Gas Corp. and Japan’s JERA, focusing on the optimization of LNG operations. The agreement aims to facilitate LNG swaps and enable a unified response to supply crises, while carefully avoiding actions that could negatively impact each other’s supply chains. This strategic alignment is rooted in the shared reality of both South Korea and Japan operating major petrochemical and refining industries, relying heavily on Middle Eastern crude imports, and being among the world’s largest LNG importers.
The interconnectedness of their energy markets is further illustrated by trade figures. In the previous year, Japan was South Korea’s third-largest destination for petroleum product exports, accounting for 11.3 percent. Data from the International Gas Union’s 2025 report reveals that in 2024, Japan and South Korea stood as the second and third-largest global LNG importers, respectively, capturing 16.47 percent and 11.43 percent of the world’s total LNG imports.
President Lee also announced South Korea’s intention to join Japan’s “POWERR Asia” initiative, an acronym for Partnership on Wide Energy and Resources Resilience. This Japanese-led initiative seeks to foster enhanced cooperation with Southeast Asian nations in areas such as the construction and shared utilization of petroleum storage facilities. The initiative is backed by $10 billion in financial support, including loans and credit assistance provided by institutions like the Japan Bank for International Cooperation.
“Prime Minister Takaichi also proposed that our two countries work closely together to deepen cooperation on resource supply chains with other Asian nations facing supply disruptions,” Lee noted.
Japan’s Prime Minister Takaichi had previously unveiled the POWERR Asia initiative for Southeast Asian nations at the virtual Asia Zero-Emission Community Plus summit in April. South Korean Prime Minister Kim Min-seok had attended that summit representing Seoul.
During the joint news conference, Takaichi expressed her satisfaction with the energy and supply chain cooperation agreement to collaborate under the POWERR Asia framework. She emphasized a focus on strengthening energy supply resilience in the Indo-Pacific region, including expanded stockpiling capacity. Furthermore, she stated that the two nations would endeavor to enhance Korea-Japan energy security through mutual supply arrangements and swap transactions involving crude oil, petroleum products and LNG, adding that Seoul and Tokyo would explore concrete follow-up measures together.
