Japan starts releasing state-held oil to stabilize supplies amid Mideast conflict

The release of oil equivalent to 30 days of domestic demand, or around 8.5 million kiloliters, is set to conclude by the end of April and follows the freeing up of 15 days' worth held by the private sector, which commenced last week.

There is growing concern about an oil supply shortage in Japan, which relies on the Middle East for over 90% of its crude oil imports, amid the blocking of the Strait of Hormuz -- a vital waterway for global energy supplies -- following the attacks on Iran launched by the United States and Israel on Feb. 28.

Despite the emergency measures, the head of an oil industry body called for an additional release beyond April, citing the possibility that supply concerns will persist.

The government, for its part, has decided, as a temporary derisking measure, to rely more on coal-fired thermal power generation, sources familiar with the matter said.

To cope with the latest energy disruption, the Japanese government has decided to release about 80 million barrels of oil, equivalent to 45 days' worth of domestic consumption and 1.8 times the amount released after the massive earthquake and tsunami in 2011 that devastated Japan's northeast.

The release by the government from the national stockpile, stored at 11 locations across the country, commenced with oil from the Kikuma base in Ehime Prefecture, western Japan, flowing through a pipeline to a neighboring facility operated by Taiyo Oil Co.

Oil will be released from eight more bases by the end of the month, including in Shirashima in Kitakyushu, Fukuoka Prefecture, with further releases from bases in Nagasaki and Kagoshima prefectures in early April.

The released oil, most of it in the form of crude oil to be refined into products such as gasoline and diesel, will be sold for around 540 billion yen ($3.4 billion) to four wholesalers, including Taiyo Oil and Eneos Corp.

In addition to the state and private sector reserve, oil stored jointly by three Middle Eastern producers in tanks in Japan will be tapped for the first time, with five days' worth set for release.

Shunichi Kito, president of the Petroleum Association of Japan, requested that the government release more of the national stockpile in May, in a meeting with Economy, Trade and Industry Minister Ryosei Akazawa.

Akazawa urged Kito at the outset of the meeting, which was open to the media, "We hope (oil companies) will accelerate efforts to secure more supplies in areas other than the United States. We will use every possible support measure at our disposal."

Speaking to reporters after the meeting, Kito said he was told the industry ministry will examine his request.

As of the end of 2025, Japan's oil stockpile stood at approximately 470 million barrels, equivalent to 254 days of domestic consumption, of which 146 days' worth was held by the government, 101 days by the private sector, and the remainder jointly stored by oil-producing countries.

The average retail price of gasoline in Japan rose to a record-high 190.80 yen per liter in mid-March, with the government resuming state subsidies to bring down the price.

While the number of oil tankers arriving in Japan after passing through the Strait of Hormuz has fallen drastically, the chemical sector is also facing difficulties in procuring naphtha, a liquid derived from crude oil that is used to produce ethylene, a raw material for plastics and synthetic fibers.

For stable electricity supplies, the government will raise the operation rate of coal-fired thermal power plants, as Japan secures coal from countries such as Australia and Indonesia, rather than the Middle East.

Since the government seeks to curb the usage of coal, which emits more carbon dioxide than other fuels, it will allow plants to operate older coal-fired equipment with low power generation efficiency for a year from April, according to the sources.

Earlier, at the first meeting of Cabinet members in charge of measures to address the Middle East crisis, Prime Minister Sanae Takaichi said that the government will continue to "make all necessary diplomatic efforts in close coordination with related countries" and try to "minimize the impact on economic activities."