Japan to release 80 million oil barrels to mitigate global disruptions caused by Middle East war—PM
Japan will release about 80 million barrels of oil from its strategic reserves, equivalent to 45 days of supply, to mitigate global disruptions caused by the Middle East war, officials said ahead of an International Energy Agency-led effort.
Japan is dependent on the Middle East for around 95% of its oil supplies and gets around 90% of its oil shipments via the Strait of Hormuz, which Iran effectively controls. Shipments via the Strait have been virtually blocked amid the US-Israeli war on Iran.
After Japan's decision, the IEA on Wednesday recommended the release of 400 million barrels of oil, unanimously agreed to by 32 member countries and the largest such move in the agency's history, to try to restrain soaring crude prices from the Iran crisis.
"The emergency stocks will be made available to the market over a timeframe that is appropriate to the national circumstances of each Member country and will be supplemented by additional emergency measures by some countries," the IEA said in a statement.
Japan's Foreign Minister Toshimitsu Motegi welcomed the IEA decision.
To avoid disruption to gasoline and other petroleum product supplies, Japan will tap its reserves in coordination with the G7 and the IEA but will begin releasing its part from March 16, Prime Minister Sanae Takaichi said in a broadcast statement, ahead of the IEA's statement.
"Rather than wait for formal IEA approval of a coordinated international reserve release, Japan will act first to ease global energy market supply and demand, releasing reserves as early as the 16th of this month," Takaichi said.
Japan plans to release 15 days' worth of private-sector oil reserves first and one month's worth of state oil reserves from around late March, an official with the Ministry of Economy, Trade and Industry said separately.
Japan's planned release will be part of the total IEA coordinated release of oil reserves, the official said.
Japan holds emergency oil reserves equivalent to 254 days of consumption, comprising national stockpiles (146 days), private-sector reserves (101 days), and joint stockpiles with producing countries (7 days)—around 470 million barrels in total.
Gasoline prices up
Government and industry data on Wednesday showed that retail gasoline prices in Japan rose by 3.3 yen to 161.8 yen per liter as of March 9.
Japan will curb domestic gasoline prices at about 170 yen per litre on a national average through subsidies, and use pre-allocated government funds to keep prices for diesel, heavy fuel oil, and kerosene in check.
The Nikkei Business Daily reported on Wednesday that Eneos Holdings, Japan's largest oil refiner, had notified its counterparties of the plans to raise wholesale gasoline prices by 26 yen per liter from March 12 to 18.
