Japan to end IEA-led coordinated oil release April 30, 2024

Japan has decided to end its oil release from the country's privately held petroleum reserves April 30, 2024, as part of its coordinated step with the International Energy Agency, the Ministry of Economy, Trade and Industry said Aug. 10, closing a faucet on barrels that initially started in March 2022 following Russia's invasion of Ukraine.

Japan's latest decision follows the resolution of the IEA governing board, the highest decision-making body, to end the coordinated oil release by the end of April 2024 following its assessment that the oil market will not be stringent without the release.

The move also comes as Japan extended the period of its 13.5-million-barrel release from its privately held petroleum reserves beyond Nov. 30, 2022, indefinitely "for the time being" on the heels of expectations that the IEA will be continuing its joint release efforts for some time.

IEA member countries agreed in March and April to release emergency oil stocks as part of two coordinated collective actions in response to tightening oil market conditions following Russia's invasion of Ukraine.

In March, IEA member countries committed to releasing 62.7 million barrels of oil as part of their collective action, followed by an additional release of 120 million barrels in their April collective action, bringing the total collective release volume to 182.7 million barrels.

The IEA had said in April that its member countries will release their emergency oil stocks over a six-month period under its collective action.

Japan's oil release

Japan's indefinite extension from April 16 to Nov. 30 comprises the release of 7.5 million barrels agreed in March and 6 million barrels agreed in April from the privately held reserves, effectively allowing local importers to cut their oil imports.

The release of 7.5 million barrels of petroleum allows local refiners and oil product importers to lower their stockpiles in privately held reserves by four days equivalent "for the time being," while the release of 6 million barrels allows them to lower the stocks by three days of stockpile requirements.

Japan had already fulfilled its IEA commitment to tap a total of 9 million barrels of crude from its national petroleum reserves as part of its commitment to release a total of 15 million barrels of oil under the IEA's release of 120 million barrels.

At the end of May 2023, Japan held a total of around 467.77 million barrels of petroleum reserves, equating to 232 days of domestic consumption. This included national petroleum reserves, oil reserves held by the private sector, and a joint crude oil storage program with oil-producing countries, according to the latest METI data.

Crude stocks in the national oil reserves accounted for 272.47 million barrels of the total, while oil products in the national reserves comprised another 8.99 million barrels.

Privately held crude reserves totaled 74.97 million barrels, with oil products stocks at 94.22 million barrels, while 17.10 million barrels of crude were held by oil producers in Japan.