TOKYO: Japan will release strategic oil reserves as early as Monday (March 16), Prime Minister Sanae Takaichi said, a unilateral move by the import-dependent Asian economy to ease concerns over rising fuel prices due to the Middle East war.
Japan is the world's fourth-largest economy and the fifth-biggest importer of crude oil, with about 95 percent of its needs coming from the Middle East and around 70 percent passing through the Strait of Hormuz before the conflict began.
Tokyo has been working with other nations on a possible coordinated release of oil to offset rising global crude prices, but Takaichi said Wednesday that Japan needed to act quickly to minimise their impact at home.
"Without waiting for a formal decision on coordinated international stock releases with the IEA (International Energy Agency), 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 would release 15 days' worth of private reserves and one month's worth of national reserves, she said.
Japan's strategic oil reserves are among the world's largest and stood 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, she said.
Maritime traffic in the strait, through which around 20 percent of global crude and gas passes, has all but halted since the war began with US-Israeli strikes on Iran on February 28.
Tokyo would still liaise with the Group of Seven economies and the IEA "to ensure that under no circumstances will there be disruptions to the supply of petroleum products such as gasoline", Takaichi said.
The government would take steps to make sure the average gasoline price will be around 170 yen ($1.07) per litre, slightly below last year's average of 178 yen, she added.
Takaichi is due to meet Donald Trump at the White House next week, where she has said she will affirm the two countries' "unshakeable unity" with the US president. - AFP
