Japan Begins Releasing Private Oil Reserves... Total of 80 Million Barrels to Be Released

15 Days of Private Sector Reserves and One Month of Government Stockpiles...
A Total of 80 Million Barrels Released

Japan Depends on the Middle East for Over 90% of Crude Oil Imports

On March 16, the Japanese government announced that it will release oil reserves equivalent to 15 days of domestic consumption, in response to anticipated disruptions in crude oil imports caused by the blockade of the Strait of Hormuz.

Nikkei reported on the same day that the Japanese government has shortened the mandatory crude oil and petroleum product stockpiling period for the private sector from the previous 70 days to 55 days. As a result, oil refiners will be allowed to release quantities exceeding their new mandatory stockpile levels.

This measure was announced through the official gazette based on Japan's Oil Stockpiling Law, which requires private oil refiners and other companies to store a specified amount of oil and stipulates the required number of stockpiling days. This is the first release of reserves since Russia's invasion of Ukraine in 2022. The government will first release reserves stored by the private sector, and plans to release a month’s worth of national reserves by the end of this month.

The total volume to be released, combining 15 days' worth from the private sector and one month's worth from the national reserves, amounts to approximately 80 million barrels, about 20% of the total reserves. The Japanese government also plans to cooperate with the International Energy Agency (IEA).

Japan relies on the Middle East for over 90% of its crude oil imports. The release of reserves is expected to help alleviate the deterioration in energy supply and demand caused by the blockade of Hormuz.

In addition, the Japanese government plans to provide subsidies to oil refiners starting March 19 to keep retail gasoline prices at around 170 yen per liter (approximately 1,595 won).

According to Nikkei, as of the end of last year, Japan’s crude oil reserves stood at 470 million barrels, equivalent to 254 days of domestic demand.

On March 11, Japanese Prime Minister Sanae Takaichi told reporters at the Prime Minister’s official residence, “We have decided to release oil reserves (unilaterally) without waiting for the formal decision on an internationally coordinated release with the IEA,” adding, “Given that more than 90% of our crude oil is imported from the Middle East, we are utilizing the reserves to ensure that the supply of petroleum products is not disrupted.”

This content was produced with the assistance of AI translation services.