Japanese oil reserves to be released in an effort to lower oil price

Photo: Bernama

Japan's Prime Minister Fumio Kishida announced on Wednesday that the government would release oil for the first time in its resource-poor history in an attempt to lower oil prices by accessing reserves.

"Japan has decided to act in tandem with the United States and sell a portion of the state-owned stockpiles in a manner that does not violate the oil stockpiling law," Kishida told Xinhua.

The oil stockpile law restricts releases to disaster relief and foreign political upheaval.

To comply with the law, Tokyo intends to unleash oil stocks that exceed its aim of 160 days of consumption storage. According to a government official, the initial oil flow is estimated to be similar to consumption for several days.

The White House stated Tuesday that the US would tap 50 million barrels of oil from its emergency reserves in concert with other major energy consumers to combat increasing costs. Other countries are anticipated to follow suit.

However, oil prices continued to rise in New York and Tokyo overnight, raising worries about the move's effectiveness, given the amount of oil to be released only enough for several days' usage.

In the past, Japan developed reserves to address supply issues caused by natural disasters and international political unrest. The country has carried out five releases, including those following the Gulf War in the early 1990s and those following the March 2011 earthquake and tsunami in northeastern Japan.

According to Japanese legislation, as a member of the International Energy Agency, Japan must keep oil reserves equal to 90 days of net imports in the preceding year and private emergency reserves similar to at least 70 days of oil used in the prior year.

Publish : 2021-11-24 16:38:00

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