Japan will unilaterally release strategic oil stocks from Monday to counter price shocks from the Middle East war, prioritising domestic energy security.
TOKYO: Japan will release strategic oil reserves as early as Monday in a unilateral move to ease concerns over rising fuel prices.
Prime Minister Sanae Takaichi said the import-dependent nation needed to act quickly to minimise the domestic impact of the Middle East conflict.
“Without waiting for a formal decision on coordinated international stock releases with the IEA, Japan has decided to take the lead in easing supply and demand in the international energy market by releasing strategic reserves as early as the 16th of this month,” Takaichi told reporters.
The country will release 15 days’ worth of private reserves and one month’s worth of national reserves.
Japan’s strategic oil reserves are among the world’s largest, standing at more than 400 million barrels as of December.
The country holds emergency reserves equivalent to 254 days of domestic consumption.
Takaichi said Japan’s “exceptionally high” dependence on Middle East oil meant the country would be “severely impacted” by war-induced shocks.
Crude imports “are expected to decrease significantly starting late this month” as many tankers remain unable to pass through the crucial Strait of Hormuz.
Maritime traffic in the strait, through which around 20% of global crude and gas passes, has all but halted since the war began with US-Israeli strikes on Iran on February 28.
Tokyo had been working with other nations on a possible coordinated release of oil to offset rising global crude prices.
Japan is the world’s fourth-largest economy and the fifth-biggest importer of crude oil.
About 95% of its needs come from the Middle East, with around 70% passing through the Strait of Hormuz before the conflict began.
Tokyo would still liaise with the Group of Seven economies and the IEA to ensure no disruptions to petroleum supply.
The government would take steps to make sure the average gasoline price will be around 170 yen per litre, slightly below last year’s average.
Takaichi is due to meet Donald Trump at the White House next week to affirm the two countries’ “unshakeable unity”.
