Japan is currently weighing the option to release an additional 20 days' worth of its national oil reserves.
The primary reason for this consideration is to stabilize energy prices amid ongoing geopolitical risks. The main trigger was the severe disruption of oil traffic through the Strait of Hormuz, a critical chokepoint for global energy supply. This event in early March sent Brent crude oil prices soaring above $100 per barrel, creating significant economic pressure. Japan, which relies on the Middle East for about 95% of its crude oil imports, is particularly vulnerable to such shocks.
In response, the Japanese government has already taken several decisive steps. First, it initiated a series of reserve releases in March, including 15 days from private stocks and 30 days from national stocks. This was part of a larger, coordinated effort with the International Energy Agency (IEA). Second, the government increased subsidies for gasoline, which successfully cushioned the impact on consumers. Average retail gasoline prices fell from a high of 190.8 yen per liter to 177.7 yen.
The current proposal for an additional 20-day release is essentially an extension of this existing strategy. With the drawdown mechanisms already active, adding more days is a credible and straightforward policy option. Although a recent two-week ceasefire between the U.S. and Iran temporarily lowered oil prices, the situation remains fragile. Tokyo sees this additional release as a vital tool to maintain policy optionality—keeping a safety valve open in case supply flows don't normalize quickly.
If fully implemented, the total drawdown could reach approximately 70 days. This would still leave Japan with well over 180 days of reserves, comfortably above the IEA's mandatory 90-day minimum. This large buffer is what gives the government the confidence to use its reserves proactively to manage price shocks and ensure national energy security.
- Strait of Hormuz: A narrow waterway between Iran and Oman, through which a significant portion of the world's oil supply passes.
- Policy Optionality: The ability of policymakers to keep various options available to respond to uncertain future events.
- Brent Crude: A major benchmark price for purchases of oil worldwide.