Japan plans to begin releasing oil from its strategic reserves on 16/3 to mitigate the impact of the Middle East conflict on domestic fuel prices, according to Reuters.

The country will release approximately 80 million barrels of oil, representing its largest-ever release. This volume is equivalent to 45 days of Japan's oil supply and could reduce its total oil reserves by about 17%.

The government has instructed domestic refineries to utilize the released fuel to ensure a stable supply for the local market. Yuriy Humber, CEO of Yuri Group consulting firm, stated that Japan's decision to release oil indicates Tokyo's assessment of a "very serious" risk of supply disruption.

Humber explained, "Reserves can help stabilize supply and prices in the short term, but they primarily serve to buy time for a response. They cannot fully compensate if disruptions in the Strait of Hormuz are prolonged."

Japan established its reserve system following the oil crisis half a century ago, in 1978. Currently, Japan relies on the Middle East for about 90% of its oil supply. However, the nation maintains oil reserves equivalent to 254 days of consumption, making it one of the countries with the highest reserve capacities globally.

The Ministry of Economy, Trade and Industry (METI) confirmed that any additional oil released from the 12 million barrels currently stored in Japan by Arab Saudi, UAE, and Kuwait will be separate from the announced 80 million barrel release plan.

METI also reported that Japan began releasing oil from private sector reserves, equivalent to 15 days of consumption, from monday. Furthermore, the country will release additional oil from state reserves by the end of march.

In addition, METI Minister Ryosei Akazawa stated that Japan is exploring alternative supply sources from the US, Central Asia, South America, and Gulf countries that can bypass the Strait of Hormuz shipping route.

Tu Anh (according to Reuters)