Japan Mulls Releasing National Oil Reserves Amid Iran Conflict

TOKYO, March 6 (Bernama-Kyodo) -- The Japanese government is considering releasing its national oil reserves to prepare for possible prolonged supply disruptions amid the US-Israeli war with Iran, Kyodo News Agency reported, citing a source familiar with the matter on Friday.

Japan may release the stockpile on its own rather than as part of a coordinated international effort, according to the source. If realised, it would be the first such move by the resource-scarce nation since the establishment of the national oil stockpiling system in 1978.

If other countries seek to join the move, the Japanese government plans to hold talks on the issue.

Releases of oil reserves are commonly carried out as a coordinated effort under the International Energy Agency. Such action was taken after Russia's full-scale invasion of Ukraine began in 2022.

Shipping traffic through the Strait of Hormuz, a vital oil route, has been paralysed as fighting in the region escalates following US and Israeli strikes on Iran late last month, raising supply concerns in Japan, which depends on the Middle East for more than 90 percent of its crude oil imports.

The release of government-held oil is intended to offset the decline in stocks held by private companies in Japan and is likely to have only a limited impact on curbing rises in gasoline and other oil product prices.

The Japanese government will carefully decide whether to release the national oil reserves and how much, the source said.

As of the end of December, Japan had oil reserves totalling 254 days of domestic consumption, including joint stockpiles with oil-producing countries. Government stockpiles, which account for 146 days of consumption, are held at bases across Japan.

The freed-up reserves may be sold to oil wholesalers in Japan to ensure a stable supply, according to the source.

-- BERNAMA-KYODO