Japan will tap its strategic oil stockpiles as war disrupts supplies, while the US urges allies to buy more American energy to boost security.
TOKYO: Japan will begin releasing oil from its national stockpiles to cushion the impact of supply disruptions caused by the US-Israeli war on Iran.
The government plans to release a record 80 million barrels, equivalent to about 45 days of supply for the resource-poor nation.
This move reduces Japan’s national reserves by 17% and is part of a broader global release of 400 million barrels coordinated by the International Energy Agency.
Japan initiated its national oil reserve system in 1978 following the Arab oil embargo.
The country currently stockpiles 254 days of consumption and depends on the Middle East for around 90% of its oil supply.
Minister of Economy, Trade and Industry Ryosei Akazawa said companies are also seeking supplies from the US, Central Asia, South America and Gulf nations that can bypass the Strait of Hormuz.
“The reserves can help stabilise supplies and prices in the short term but they mainly buy time,” said Yuriy Humber, CEO of Tokyo-based consultancy Yuri Group.
He added that stockpiles cannot fully offset a prolonged disruption in the Strait of Hormuz.
Japan will start releasing 15 days’ worth of oil from private-sector reserves and a month’s worth from state reserves from late this month.
Any potential release from 12 million barrels jointly held in Japan by Saudi Arabia, the UAE and Kuwait would be in addition to the announced 80 million barrels.
US Environmental Protection Agency Administrator Lee Zeldin suggested the conflict highlights the security of American supplies.
“This conflict … is a reminder that along the Indo-Pacific, a lot of other nations can look to the United States, where we have the resources,” Zeldin told Reuters.
Japan gets around 4% of its oil from the US, having largely stopped purchases from Russia after its 2022 invasion of Ukraine.
