Japan Taps State Oil Reserves as Middle East Conflict Drives Prices Sky-High
Prime Minister Sanae Takaichi announced Tuesday that Japan will begin releasing oil from state reserves on Thursday, responding to soaring oil prices and supply fears amid the escalating U.S.-Israeli war with Iran.
The decision came during the first Cabinet meeting focused on shielding Japan’s economy from Middle East tensions. It follows last week’s release of oil from private-sector stockpiles.
The government will auction about 8.5 million kiloliters from 11 storage sites nationwide, per the Ministry of Economy, Trade and Industry.Takaichi added that joint reserves from Middle Eastern oil producers, stored in Japan, will be accessed by month’s end. “The peace and stability of the Middle East are vital for Japan and the world,” she stated.
Tokyo pledges ongoing diplomatic pushes with allies to limit economic fallout.During last Thursday’s Washington summit, Takaichi and U.S. President Donald Trump stressed securing safe passage through the Strait of Hormuz, a critical oil chokepoint.
Trump voiced optimism Monday about U.S.-Iran talks, citing “major points of agreement,” with son-in-law Jared Kushner and envoy Steve Witkoff involved—though Tehran denies any negotiations.
Japan sources over 90% of its crude from the Middle East, mostly via the Hormuz Strait, now blocked by Iran since late February clashes began, fueling the price spike.On March 11, ahead of an International Energy Agency-led release, Takaichi outlined unilateral action: 15 days’ private reserves from March 16, followed by a month’s state oil.The meeting will also tackle risks like reduced ethylene output (key for plastics) and diversifying suppliers.
The Cabinet allocated 800.7 billion yen ($5 billion) from this fiscal year’s budget, including 794.8 billion yen for gasoline subsidies. With regular gas hitting a record 190.80 yen per liter last week, the goal is a national average of around 170 yen.Later Tuesday, Takaichi spoke by phone with Malaysian PM Anwar Ibrahim and Marshall Islands President Hilda Heine, agreeing to cooperate on de-escalating the crisis, per the Foreign Ministry.