SYDNEY: If you knew your local Coke factory was having chronic supply-chain problems, buying a bigger refrigerator to store more soda would be one way to deal with it. The better strategy, however, might be to switch to Pepsi instead.

And yet the “bigger refrigerator” path is the one governments in Asia are following to protect themselves against any repeat of the oil shortages prompted by this year’s closure of the Strait of Hormuz.

India will build new storage terminals and refineries to guard against future shocks, the government said this month. Similar plans are being advanced in Indonesia, the Philippines, Pakistan and Vietnam.

That could give energy-hungry emerging Asia something equivalent to the strategic petroleum reserves that developed countries established after the 1973 oil crisis, and the similar stockpile that China has been building up over the past decade.

With the US and Iran once again trading blows this week and threatening to shatter the fragile peace agreement signed just three weeks ago, such an insurance policy seems like plain good sense. The average 3.8 million barrels a day released from oil inventories since the start of the war - not much less than what the United Arab Emirates can produce in normal times - has been a major contributor to the world’s ability to ride out the conflict.

If Asian economies had similar stocks on hand, then in future they might not have to suffer the four-day work weeks and soaring fuel prices that have characterised the past few months. 

ELECTRIFICATION 

That’s all true, but there’s another option they shouldn’t ignore: electrification. If your problem is an over-reliance on unpredictable crude imports, strategic reserves and electric vehicles are both doing much the same thing.

The first protects you by providing an alternative source of petroleum in the event of disruptions. The latter helps by reducing your need for oil in the first place and increasing the energy security of your economy.

Governments could afford to push a lot harder on this front, by diverting more of their oil-shock insurance spending to EV subsidies and charging networks, instead ...