The Japanese government on Thursday started releasing state-held oil to stabilize supplies amid the ongoing U.S.-Israeli war with Iran, as part of the largest-ever drawdown of reserves stockpiled in the country.
The release of oil equivalent to 30 days of domestic demand, or around 8.5 million kiloliters, is set to conclude by the end of April and follows the freeing up of 15 days’ worth held by the private sector, which commenced last week.
There is growing concern about an oil supply shortage in Japan, which relies on the Middle East for over 90 percent of its crude oil imports, as Tehran has effectively blocked the Strait of Hormuz — a vital waterway for global energy supplies — following the attacks on Iran launched by the United States and Israel on Feb. 28.
To deal with the energy supply disruption, the Japanese government has decided to release about 80 million barrels of oil, equivalent to 45 days’ worth of domestic consumption and 1.8 times the amount released after the massive earthquake and tsunami in 2011 that devastated Japan’s northeast.
The release by the government from the national stockpile, stored at 11 locations across the country, commenced with oil from the Kikuma base in Ehime Prefecture, western Japan, flowing through a pipeline to a neighboring facility operated by Taiyo Oil Co.
Oil will be released from eight more bases by the end of the month, including in Shirahima in Kitakyushu, Fukuoka Prefecture, with further releases from bases in Nagasaki and Kagoshima prefectures in early April.
The released oil, most of it in the form of crude oil to be refined into products such as gasoline and diesel, will be sold for around 540 billion yen ($3.4 billion) to four wholesalers, including Taiyo Oil and Eneos Corp.
In addition to the state and private sector reserve, oil stored jointly by three Middle Eastern producers in tanks in Japan will be tapped for the first time, with five days’ worth set for release.
As of the end of 2025, Japan’s oil stockpile stood at approximately 470 million barrels, equivalent to 254 days of domestic consumption, of which 146 days’ worth was held by the government, 101 days by the private sector and the remainder jointly stored by oil-producing countries.
The average retail price of gasoline in Japan rose to a record-high 190.80 yen per liter in mid-March, with the government resuming state subsidies to bring down the price.
While the number of oil tankers arriving in Japan after passing through the Strait of Hormuz has fallen drastically, the chemical sector is also facing difficulties in procuring naphtha, a liquid derived from crude oil that is used to produce ethylene, a raw material for plastics and synthetic fibers. (Kyodo)