Hanoi (VNA) – The Politburo’s Resolution 70-NQ/TW, issued on August 20, 2025, targets petroleum reserves equal to roughly 90 days of net imports by 2030 and mandates an onshore and offshore crude oil and petroleum storage system to underpin economic growth and national energy security.
In an interview recently granted to the Vietnam News Agency, Dr Nguyen Van Tu, General Director of the Vietnam Petroleum Institute (VPI), said petroleum reserves are a critical line of defence, but a genuine energy security “shield” must be built in layers.
The first layer is ramping up domestic energy self-sufficiency in line with the resolution, which targets domestic refineries meeting at least 70% of the domestic fuel demand.
The second is diversifying supply sources and import routes to defuse geopolitical risk. The third is accelerating the energy transition by scaling renewables, liquefied natural gas (LNG)-fired power, nuclear energy and higher biofuel blending to reduce the economy’s exposure to oil price shocks.
The fourth layer targets energy conservation and efficiency, aiming to cut consumption by 8%–10%. The fifth is sharper forecasting, risk management and coordination across energy sector governance.
Tu said the VPI, tasked by the Ministry of Industry and Trade (MoIT) and the Vietnam National Industry-Energy Group (Petrovietnam) with drafting the national energy storage strategy, calls for the need to clearly distinguish three reserve tiers, including strategic state-owned stocks for emergencies, mandatory commercial reserves held by wholesalers and distributors, and production inventories of crude, feedstock and intermediate products at refineries.
VPI estimates show that Vietnam’s national reserves cover just 7–10 days of consumption. Adding mandatory commercial stocks at wholesalers (about 20 days), plus roughly five days at distributors and inventories at the Dung Quat and Nghi Son refineries, brings the total to 30–65 days. Most, however, are working inventories rather than dedicated strategic buffers.
That is a considerable gap by international standards, Tu said, citing VPI’s benchmarking of reserve systems in more than 20 countries. International Energy Agency (IEA) members must hold emergency oil stocks equivalent to at least 90 days of net imports.
For an economy that is highly open and heavily reliant on imported refined products, thin reserves expose Vietnam to major categories of risk, he said.
The first is physical supply disruptions. With stocks covering only a few weeks, any prolonged interruption along key shipping lanes or at major supply sources could rapidly threaten fuel for factories, transport and daily life.
The second is price volatility and inflation. Low reserves leave Vietnam more exposed to buying fuel at elevated global prices during supply squeezes, feeding through to higher transport and production costs and pushing up consumer prices.
The third is macroeconomic and balance-of-payments risk. A sharp rise in the energy import bill can strain the exchange rate, drain foreign reserves and drag on GDP growth. Such shocks often hit fast and are difficult to forecast.
Drawing on international experience, Tu said the State should maintain the core layer of strategic reserves while companies shoulder mandatory commercial reserves under legal obligations and a reasonable cost recovery mechanism. That would ease the burden on public investment and pool private capital more effectively.
Integrated planning is crucial, he said. A strategic storage site only delivers full value as part of a complete system that includes import terminals, pipelines, tanks, distribution networks and mechanisms for releasing and replenishing stocks.
Long-term coordination remains a challenge but can be solved with the right institutional framework, he said. Once a clear legal framework defines the rights, obligations and interests of each party, coordination can run on stable, transparent rules rather than ad hoc deals.
As part of drafting the national energy storage strategy, VPI proposed a model grounded in quantitative analytical tools. These include optimising the crude-versus-products reserve mix with a newsvendor inventory model similar to the US Energy Information Administration’s approach, determining optimal size and duration, running cost-benefit analyses, and valuing security based on the economic cost of supply disruptions.
From that analysis, VPI proposed a national energy reserve model tailored to Vietnam, built on several core principles.
Strategic national reserves should be clearly separated from commercial inventories to function as a genuine shield rather than as working capital, maintaining an appropriate balance between crude oil and refined products.
The model should combine onshore and offshore storage facilities, in line with the resolution’s orientation, with storage facilities distributed regionally with port infrastructure, pipeline networks and major consumption centres.
Implementation should follow a phased roadmap rather than simultaneous nationwide construction. Priority should go to projects that maximise the use of existing infrastructure and deliver the highest returns, then gradually expand to hit the 90-day net-import target by 2045.
On governance, VPI recommended establishing a single coordinating body to oversee fuel security risks and strategic reserve management. The model will leverage existing infrastructure, storage assets and the operational expertise of Vietnam’s key state-owned energy enterprises while ensuring centralised and effective coordination.
Tu revealed that VPI proposed six solution packages to support the MoIT in formulating the strategy, including building a comprehensive legal framework, diversifying financing for reserve infrastructure, offering preferential policies on land access, planning and administrative procedures, alongside appropriate tax and fee incentives; adopting a flexible procurement mechanism that allows the State to take advantage of favourable price cycles to build strategic reserves at lower cost.
Finally, VPI called for bolstering governance capacity and expanding the use of risk management and hedging tools./.
