The Japanese government began the release of state-held oil reserves on Thursday to stabilize domestic supplies amidst the ongoing conflict in the Middle East. This initiative represents the largest-ever drawdown of stockpiled reserves in the country’s history. The release, which is equivalent to 30 days of domestic demand or approximately 8.5 million kiloliters, is scheduled to conclude by the end of April. This follows a separate release of 15 days’ worth of oil held by the private sector, which commenced last week.
Fearing oil shortage
According to Japan’s Kyodo News Agency, there is major concern regarding a potential oil shortage, as Japan relies on the Middle East for more than 90 percent of its crude oil imports. The situation has intensified as Tehran has effectively blocked the Strait of Hormuz, a critical waterway for global energy, following military actions launched by the U.S. and Israel on February 28. To address this disruption, the government decided to release a total of 80 million barrels—equivalent to 45 days of domestic consumption. This volume is 1.8 times greater than the amount released following the devastating earthquake and tsunami in 2011.
Japan fuel hits record
The energy crisis has pushed the average retail price of gasoline in Japan to a record high of 190.80 yen per liter as of mid-March. In response, the government has resumed state subsidies to help lower costs for consumers. Beyond fuel, the industrial sector is also facing challenges; the chemical industry is struggling to procure naphtha. Derived from crude oil, naphtha is essential for producing ethylene, which serves as a primary raw material for synthetic fibers and plastics. The drastic decline in oil tankers arriving from the Strait of Hormuz continues to pressure these vital supply chains.
