Japan is considering stockpiling U.S. crude oil to boost its energy security, Reuters has reported, citing Prime Minister Sanae Takaichi during her visit to Washington.
“I also conveyed to President Donald Trump my intention to realize a joint project in which crude oil procured from the United States would be stockpiled in Japan,” Takaichi said, adding, “This is based on the understanding that diversifying procurement sources will contribute to a stable supply of energy for Japan and for Asia as a whole.”
Japan’s Prime Minister did not elaborate on whether the stockpiles would be part of the country’s strategic reserve—one of the largest in the world—or whether they would be made available to the United States should the need arise.
Japan’s strategic oil reserve holds some 470 million barrels, which are enough to cover 254 days of demand, including 146 days’ worth of consumption in national reserves, and more than 100 days of inventories with the private sector. This is a much more comfortable supply cushion than, for instance, Australia’s, but if the crisis extends in time, the situation will become problematic for Japan. The strategic reserve includes some 13 million barrels in joint stocks with Saudi Arabia, the UAE, and Kuwait.
The country tapped that reserve earlier this month as supply security deteriorated amid the Strait of Hormuz traffic freeze. Initially, the government said it would release 15 days’ worth of oil consumption and then continue with another 30 days’ worth at the end of the month. Japan gets 90% of its oil imports from the Middle East, which puts it in an especially vulnerable position.
The last time Japan was forced to tap its oil reserves was in 2022, when, as a member of the International Energy Agency, it took part in a joint release of oil to calm down soaring oil prices after the Russian invasion of Ukraine.
By Irina Slav for Oilprice.com
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