Tatsuya Terazawa, Chairman and CEO of the Institute of Energy Economics of Japan, has shared how Japan weathers short-term energy shocks while staying firmly on a long-term strategic course, offering valuable policy insights for Vietnam as it seeks to strengthen energy security and pursue sustainable growth.
In an interview granted to Vietnam News Agency correspondents in Tokyo, Terazawa said Japan’s ability to respond effectively to supply disruptions—particularly amid geopolitical tensions in the Middle East—rests heavily on prior preparation.
Experiences from Japan
According to the expert, when risks to global energy flows rise, Japan activates a combination of measures, including releasing strategic reserves, diversifying import routes and adjusting the fuel mix for power generation.
Releasing reserves, he noted, is not only about supplementing supply but also about stabilising market sentiment and preventing panic.
At the same time, Japan reduces reliance on vulnerable chokepoints such as the Strait of Hormuz by expanding alternative shipping routes and sourcing energy from a wider range of regions. These measures reflect a key principle in energy policy - not only ensuring supply, but also minimising risks arising from geopolitical chokepoints.
A cornerstone of Japan’s resilience is its substantial crude oil stockpile, equivalent to around 254 days of consumption. Beyond its technical function, this buffer plays a crucial psychological role, reassuring businesses and households that supply can be maintained over an extended period, and the risk of panic is significantly reduced.
Liquefied natural gas (LNG) also forms a key pillar of Japan’s energy security. The country has developed a stable LNG import structure through long-term contracts and direct participation in upstream projects. This approach not only ensures steady supply but also mitigates price volatility and enhances control over the value chain.
Terazawa highlighted energy efficiency as another critical lesson. Since the 1973 oil crisis, Japan has consistently improved energy use, becoming one of the most energy-efficient economies in the world. Lower consumption reduces import dependence, cuts production costs and strengthens economic competitiveness, making efficiency gains a low-cost but high-impact solution in both the short and long term.
Recommendations for Vietnam
Drawing on Japan’s experience, Terazawa suggested that Vietnam is well-positioned to further develop a more resilient, flexible and sustainable energy system. With rapid economic growth driving rising energy demand, Vietnam has an opportunity to build a modern strategy that balances security, efficiency and sustainability.
Expanding crude oil reserves should be a priority to reinforce national energy security, the Japanese expert, adding that Vietnam could gradually scale up its reserves by combining state and commercial storage, and that stronger reserves will improve the country’s ability to respond to supply shocks while helping stabilise domestic markets, creating favourable conditions for production and business activities.
Vietnam can also enhance its LNG import framework by increasing the share of long-term contracts and diversifying supply sources. Deeper participation in the global LNG value chain will further strengthen its position and resilience in the global energy market, he said.
He noted that improving energy efficiency remains a long-term imperative. Continued gains across industry, construction and consumption will ease import pressure, lower costs and support green growth objectives.
As Vietnam holds significant potential in renewable energy, particularly wind power, unlocking this potential - combined with investment in interregional power transmission systems - will help optimise both the generation and distribution of electricity, the expert said, adding that a modernised grid will enable renewables to play a bigger role in the national energy mix.
Flexible backup systems are equally essential, he said, noting that LNG-fired power can quickly offset fluctuations in renewable output, while pumped-storage hydropower offers large-scale, long-duration energy storage - effectively acting as a "natural battery" to balance supply and demand.
Looking further ahead, Terazawa pointed to the importance of stable baseload power. He said that as electricity demand rises, particularly from hi-tech industries and data centres, Vietnam may consider options such as nuclear energy to ensure long-term supply security and support the transition toward a low-emission economy.
Terazawa also underscored the role of international cooperation in the field, saying that Japan, with its technological expertise and financial capacity, is a key partner for Vietnam in areas ranging from oil stockpiling and LNG infrastructure to renewable energy and emerging fuels such as hydrogen and ammonia.
Frameworks such as the Asia Zero Emission Community provide additional avenues for collaboration, he said, noting that through this platform, Vietnam not only has the opportunity to partner with Japan, but can also engage in a broader regional network to access technology, resources, and expertise./.
