Japan plans to release 15 million barrels of oil from its petroleum reserves, including from the national oil reserves, as part of the International Energy Agency's joint release, sources at the Ministry of Economy, Trade and Industry told S&P Global Commodity Insights April 7.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
It was still not clear about the timing and duration of the additional oil release as it is still coordinating with the IEA, the sources said.
METI's confirmation comes after Japanese Prime Minister Fumio Kishida said earlier in the day that the country will release 15 million barrels of oil from the privately-held and national petroleum reserves as part of the IEA's coordinated oil release of 120 million barrels.
Japan's scale of oil release is the second largest after the US as part of the IEA release, and this would be the country's first oil release of the national oil reserves since it was established in 1978, Kishida told reporters, according to Japanese public broadcaster NHK.
Japan's additional oil release comes to light after IEA Executive Director Fatih Birol said April 6 that IEA member countries have agreed to release 120 million barrels of oil from storage, which includes 60 million barrels from the US, as part of its overall draw from its strategic petroleum reserve.
This comes after the US pledged to tap 180 million barrels of oil last week, effectively releasing 1 million b/d for six months from May, in a bid to alleviate market concerns over potential shortages from a drop in Russian oil exports.
The additional 15 million barrels release comes as Japan is in the process of releasing 7.5 million barrels of crude and oil products in the privately-held petroleum reserves, which equates to four days of mandatory stockpile volumes, by allowing local refiners and oil products importers to lower their stockpiles during a 30-day period running up to April 8.
Japan's additional crude release comes after it started releasing barrels of oil from privately-held petroleum reserves March 10; part of its contribution to the IEA's coordinated release of around 60 million barrels to aid oil prices rattled by Russia's invasion of Ukraine.
Japan's 7.5 million barrels release equates to 12.5% of the worldwide total, and it is the second-largest after the US' release of 30 million barrels from its Strategic Petroleum Reserve under the IEA's last joint action.
The country also plans to sell an additional 300,000 kiloliters, or 1.89 million barrels, of Hout crude from its national petroleum reserves via a public tender on April 8, the last sale in its joint efforts with the US and other countries to stabilize oil prices.
In its latest tender scheduled April 8, Japan will offer up to three shipments of Hout crude from the Shirashima national oil reserves terminal in Kita Kyushu City in the southwest for delivery over May 20-Aug. 31.
Following the upcoming sale of Hout crude produced in the Saudi Arabia-Kuwait Neutral Zone, Japan's crude sales from the national oil reserves would amount to a total of around 660,000 kiloliters, or 4.15 million barrels.
Japan on March 9 sold 260,000 kiloliters, or 1.64 million barrels, of Khafji and Hout crudes produced in the Neutral Zone from its national petroleum reserves via public tenders after selling about 100,000 kiloliters, or 629,000 barrels, of Oman crude from the reserves via a Feb. 9 public tender.
Japan's serialized sales of national petroleum reserves was made by advancing its planned sales of crude for replacement in the national reserves without violating the country's petroleum stockpiling law.
In recent years, the country has been replacing medium and heavy crude stocks in the national petroleum reserves with lighter grades, reflecting the growing domestic demand for such products.
At end-January, Japan held a total of around 473.05 million barrels of petroleum reserves, equating to 236 days of domestic consumption, comprising national petroleum reserves, oil reserves held by the private sector and a joint crude oil storage program with oil-producing countries, according to the METI data.
Crude stocks in the national oil reserves accounted for 285.99 million barrels of the total, while oil products in the national reserves comprised another 8.99 million barrels.
Privately-held crude reserves totaled 74.03 million barrels, with oil products stocks at 97.74 million barrels, while 6.29 million barrels were held by oil producers in Japan.