Japan - Malaysia Strengthen Energy Cooperation, Malacca Strait to Be in the Spotlight

Japan and Malaysia have agreed to strengthen energy cooperation and maritime security amid rising global supply uncertainties due to the Middle East conflict.

As reported by Kyodo News, quoted Wednesday, June 10, Japanese Prime Minister Sanae Takaichi and Malaysian Prime Minister Anwar Ibrahim reached the agreement in a meeting in Tokyo, Wednesday.

For Japan, Malaysia is not an ordinary partner. The country supplies about 15 percent of Japan's liquefied natural gas or LNG needs. Most crude oil heading to Japan also passes through the Malacca Strait, an important trade route between Malaysia and Indonesia.

In a joint statement, Anwar committed to maintaining the supply of LNG and other energy products to Japan, including naphtha. Naphtha is a petroleum derivative product that is widely used as a raw material for the chemical industry.

The two leaders also agreed to strengthen supply chain cooperation, namely the network of production and distribution of goods from raw materials to the market. The focus includes critical minerals needed for the technology and clean energy industries.

In the field of security, Japan and Malaysia signed a document of cooperation in coastal guards. The goal is to maintain safe and free navigation in the region's waters.

Takaichi said the cooperation was important to strengthen the resilience of Japan, Malaysia, and the region.

"I believe this agreement will increase the independence and resilience of Japan, Malaysia, and the wider region," Takaichi said, quoted by Kyodo News.

The issue of maritime security is sensitive because both countries are pushing for a free and open Indo-Pacific vision amid China's growing influence.

In the field of defense, Japan ensures the continuation of official security assistance to Malaysia. Since 2023, Tokyo has provided equipment such as rescue boats and surveillance drones.

Anwar also welcomed Japan's defense policy change in April which opened up opportunities to export equipment with lethal capabilities to certain partner countries. According to him, this change expands the opportunities for defense cooperation between the two countries.

In addition to energy and maritime, Japan and Malaysia agreed to establish the Japan-Malaysia AI Platform. This platform is intended to support artificial intelligence companies in responding to social challenges.

Takaichi previously encouraged Southeast Asian countries to work with Japan to develop an AI model that is in line with local languages and the region's economic needs.

On the same day, Takaichi also met with Lao Prime Minister Sonexay Siphandone in Tokyo. The two agreed to strengthen cooperation in energy, resources, and regional supply chain resilience.

Takaichi and Anwar's meeting comes ahead of the 70th anniversary of Japanese-Malaysian diplomatic relations next year. For Tokyo, relations with Southeast Asia are an important part of the Indo-Pacific Free and Open Strategy.