Japan to proceed with oil shipping aid, restore national crude reserves to 90 days of net imports

A high-level policy meeting at Japan's Ministry of Economy, Trade and Industry approved a set of steps on Aug. 24, including a framework to help reduce transportation costs for crude oil and naphtha shipments that do not transit chokepoints such as the Strait of Hormuz.

The move comes as Japan has recognized the need to reduce its dependence on crude oil imports that pass through chokepoints such as the Strait of Hormuz, given that alternative transportation routes, including pipelines in Saudi Arabia and the UAE, have operated effectively.

METI's Natural Resources and Fuel Committee approved the framework proposed Aug. 7 and proceeded with considering specific institutional measures.

These measures will include support for costs associated with securing stable transportation, participation in pipeline construction projects that serve as alternative transport routes and consideration of a future framework for maritime transport, according to documents presented at the meeting.

Taking into account the latest developments in the Middle East, the government will examine measures to ensure stable maritime transportation and secure sufficient insurance capacity for the seaborne transport of crude oil, natural gas, and other commodities necessary for Japan's stable energy supply, according to the documents.

Oil reserve

In addition, METI's Natural Resources and Fuel Committee approved the government's plan to take the necessary steps to rapidly restore national crude oil reserves to the International Energy Agency's standard of 90 days of supply during fiscal year 2026-27 (April-March).

The government also aims to restore stockpiles to a level equivalent to 90 days of crude imports, including domestically refined naphtha, in FY 2027-28.

Japan's national crude reserves are currently below the IEA's 90-day net imports standard, according to a METI official.

The country's petroleum reserves were equivalent to 204 days of domestic consumption as of Aug. 21, comprising 103 days in national oil reserves, 98 days in privately held reserves and four days in a joint crude storage program with oil-producing countries, according to the latest METI data released Aug. 24.

Japan decided in March to release the equivalent of about 50 days' worth of national petroleum reserves, while also implementing a 15-day reduction in required private-sector inventories and releasing about six days' worth of jointly held oil stocks maintained with oil-producing countries, as tankers have effectively been unable to pass through the Strait of Hormuz. The Middle East accounted for 94% of Japan's crude imports in 2025, according to METI data.

SAF mandates

The Natural Resources and Fuel Committee also approved a set of sustainable aviation fuel supply mandates proposed on Aug. 17, requiring companies to supply 1%-5% of domestic jet fuel consumption for international flights from FY 2030-31 to FY 2034-35.

The approved SAF supply mandates marked a setback from the supply mandates proposed in FY 2024-25 for the five-year period, under which jet fuel suppliers were expected to supply volumes equivalent to at least 5% of the greenhouse gas emissions from jet fuel produced and supplied in Japan in FY 2019-2020.

Under the approved plan, the SAF supply mandates would apply only to companies that supply 3,000 kiloliters (18,869 barrels) or more of jet fuel annually for international flights at seven airports with the highest international refueling volumes.

The approved SAF supply mandates would require companies to supply at least 1% of domestic jet fuel supply volumes in FY 2030-31, at least 3% in FY 2031-32 and at least 5% in each fiscal year from FY 2032-33 through FY 2034-35.

Under the approved SAF supply mandates, targets could be revised downward in cases of unavoidable circumstances, such as natural disasters, according to the documents. However, they would not be allowed to be revised downward due to facility problems, unsuccessful commercial negotiations with airlines or the cancellation or postponement of SAF plant construction projects.

The approved SAF supply mandates refer to domestic supply volumes supplied for international flights at the designated airports: Narita International Airport, Haneda Airport, Kansai International Airport, Chubu Centrair International Airport, New Chitose Airport, Fukuoka Airport and Naha Airport.

The seven airports together refueled 8.17 million kl, or 51.39 million barrels, of jet fuel for international flights in FY 2024-25, accounting for 68.3% of Japan's total international jet fuel refueling volume, according to METI's survey of local refiners.