The Japanese government has started releasing part of its strategic oil reserves following a coordinated plan by the International Energy Agency to ease the surge in global oil prices triggered by the ongoing Middle East conflict.
Authorities announced the move on Monday through a notice published in the government gazette, indicating that the country’s oil stockpile level would be reduced. The directive requires managers of petroleum reserves to release a portion of their stored supply in line with the new policy.
The decision follows an agreement reached by member countries of the International Energy Agency on March 11 to collectively tap into emergency oil reserves in order to stabilise the global market. The planned release is expected to be the largest coordinated deployment of strategic oil stockpiles in history.
Japan relies heavily on imports from the Middle East, which account for roughly 95 per cent of the country’s oil supply. With the conflict in the region disrupting markets and driving up prices, Tokyo moved quickly to begin releasing reserves as part of the international response.
Government spokesperson Minoru Kihara confirmed that Japan will initially release petroleum reserves equivalent to about 15 days of private-sector holdings.
Japan maintains one of the world’s largest emergency oil reserves. As of December, the country’s combined strategic stockpiles were estimated at more than 400 million barrels, representing about 254 days of domestic consumption.
According to Ryosei Akazawa, Japan’s minister of economy, trade and industry, the first phase of the release will focus on private-sector reserves before any government-held stockpiles are deployed.
Earlier indications from government officials suggested that Japan may eventually release up to one month’s worth of national oil reserves if the situation in global markets requires further action.
The coordinated international effort will involve a significant amount of oil being made available to the market. The International Energy Agency has said that a total of about 271.7 million barrels from government-managed reserves will be released by participating countries.
Under the plan, member nations in Asia and Oceania will begin releasing oil immediately, while countries in Europe and the Americas are expected to follow toward the end of March.
Energy analysts say the move is intended to help stabilise supply and reduce the pressure on global oil prices as tensions in the Middle East continue to disrupt markets.
