The Philippines is exploring a long-term energy partnership with the United Arab Emirates (UAE) that could strengthen the country's oil supply security and reduce its exposure to sudden movements in global fuel prices. A proposed strategic oil storage hub is among the initiatives being discussed, with the facility intended to provide the country with greater access to stored oil during supply disruptions and price shocks.
Sen. Erwin Tulfo, chairman of the Senate Committee on Energy, led Philippine representatives in discussions with UAE officials on Oct. 29, following an earlier meeting at the Senate involving Senate President Sherwin Gatchalian and representatives of Abu Dhabi National Oil Co. (Adnoc). The initial talks also included UAE Ambassador Mohamed Obaid Alqataam Alzaabi and Adnoc officials.
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Building a Strategic Oil Reserve
Tulfo said he has been advocating for the proposed facility because of its potential benefits to consumers facing high fuel costs.
“Because we see how beneficial it would be for Filipinos who are experiencing price shocks from high oil prices because we lack access to it,” Tulfo said.
The Philippine delegation also included Ambassador to the UAE Alfonso Ver and Special Envoy to the UAE for Trade and Investment Kathryna Yu-Pimentel. On the UAE side, the delegation was led by Adnoc Chairman Sultan Ahmed Al Jaber, who expressed willingness to move forward with the proposed partnership.
Adnoc currently supplies Petron Corp. with about 40,000 barrels of oil a day. UAE officials said the proposed storage hub could help increase supply volumes and offered to share an existing storage contract framework for Philippine review.
The proposal has also received support from Gatchalian, who called on the state-owned Philippine National Oil Company (PNOC) on Oct. 26 to act promptly on the opportunity. He said Adnoc was prepared to cover the costs of the storage tanks and oil inventory, provided PNOC could make suitable land available.
Under the proposed arrangement, the Philippines would also have the right of first refusal to purchase stored oil when needed.
“PNOC should not dilly-dally because Adnoc is ready,” Gatchalian said.
A Broader Energy Partnership
The second quarter of 2027 has been identified as the target period for the project's rollout. However, the parties still need to reach agreements on the facility's location, infrastructure responsibilities, commercial terms, and implementation schedule.
Beyond oil storage, the proposed cooperation could extend to crude oil supply, refinery investments, fuel retail networks, renewable energy, and gas-to-power development. Tulfo said the broader partnership has yet to be finalized and that he would lead further discussions to advance the proposal.
The country's dependence on imported fuel leaves households and businesses vulnerable to international supply disruptions and price fluctuations. A strategic oil storage hub could provide another layer of protection, but its actual benefits will depend on the final agreement, the amount of oil made available, and how quickly the facility becomes operational. Stronger energy security must ultimately translate into a more reliable supply and greater protection for consumers against sudden fuel price increases.
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