Japan is preparing to begin withdrawing quantities of its oil reserves starting tomorrow, Monday, with the aim of mitigating the impact resulting from the American-Israeli war on Iran, which is reminiscent of the oil crisis that occurred half a century ago, which originally prompted Tokyo to build up these reserves.
With the noticeable rise in gasoline prices across Japan as a result of the war that disrupted supplies from the Strait of Hormuz, Tokyo announced its intention to withdraw an unprecedented amount of 80 million barrels of oil, which is equivalent to about 45 days of supplies.
The Japanese government has asked local oil refiners to use the crude oil that will be withdrawn, which will reduce national reserves by 17 percent, to secure domestic supplies.
It is not yet clear how much oil Japan will allocate to participate in a global withdrawal of up to 400 million barrels, which is coordinated by the International Energy Agency with the aim of dealing with the supply shock resulting from the war and price fluctuations.
Ryusei Akazawa, Minister of Economy, Trade and Industry, indicated that his country is also seeking supplies from the United States, Central Asia, South America, and Gulf countries capable of bypassing passage through the Strait of Hormuz.
Lee Zeldin, director of the US Environmental Protection Agency, told Reuters: “When you see the conflict in the Middle East… you remember that all the crude oil that was transported from Alaska to Japan was never targeted by a successful terrorist attack… This conflict… is a reminder that many other countries in the Indo-Pacific region can look to the United States, where we have the resources.”
gain time
Japan gets only about four percent of its oil from the United States, having largely stopped buying oil from Russia since invading Ukraine in 2022, the most recent time Tokyo has resorted to tapping reserves.
Yuri Humber, CEO of Tokyo-based consulting firm Yuri Group, said that the withdrawal that Japan will implement shows how seriously Tokyo is taking this disorder.
He added: “Reserves can help stabilize supplies and prices in the short term, but they are mainly a way to buy time. They cannot fully compensate for a prolonged disruption in the Strait of Hormuz.”
The Ministry of Economy, Trade and Industry said that any potential withdrawal from the 12 million barrels held jointly by Saudi Arabia, the UAE and Kuwait in Japan would be in addition to the 80 million barrels announced.
Japan began an oil reserve storage system in the country in 1978, several years after the Arab oil export cessation crisis. Japan, a member of the Group of Seven major industrialized countries, has oil reserves sufficient for 254 days of consumption. Japan depends on the Middle East to obtain about 90 percent of its oil needs. (Al Jazeera Net)
