Japan began releasing oil from its reserves on Monday to address supply concerns stemming from the U.S.-Israel war with Iran and to stabilize the distribution of petroleum products, taking action ahead of a planned International Energy Agency (IEA)-led coordinated release [1]. This marks Japan's first oil reserve release since 2022, when it participated in an IEA effort following Russia's invasion of Ukraine [1]. The initial phase involves freeing up 15 days' worth of reserves held by the private sector, with a month's worth of state-held oil to follow [1].
Chief Cabinet Secretary Minoru Kihara stated that the release was prompted by expectations of a significant decrease in Japan's crude oil imports from late March onwards due to the effective closure of the Strait of Hormuz, a critical route for oil tankers [1]. The government aims to ensure the released oil circulates smoothly in the market and will continue to take all possible steps to maintain stable energy supply, including international coordination [1]. The IEA announced that its 32 member countries, including Japan, will soon start a coordinated release of 400 million barrels of oil to counter disruptions caused by the Middle East conflict [1].
Crude oil futures have surged, with West Texas Intermediate (WTI) briefly topping $100 per barrel in New York on Sunday, reflecting market anxiety over a prolonged conflict and supply disruptions [1]. In response, Japan will reduce the mandatory reserve requirement for oil refiners and trading companies from 70 days to 55 days, allowing them to draw down existing stocks [1]. Last Wednesday, Prime Minister Sanae Takaichi revealed plans to release about 80 million barrels of oil, the largest ever, equivalent to 45 days' worth of domestic consumption and 1.8 times the amount released after the 2011 earthquake and tsunami [1]. Preparations are underway to sell government-held reserves to wholesalers [1].
As of the end of 2025, Japan's reserves totaled approximately 470 million barrels, covering 254 days of domestic consumption, with 146 days' worth government-owned, 101 days held by the private sector, and the remainder jointly stored with oil-producing countries [1]. This is the seventh time Japan has tapped its oil reserves since the system began in the 1970s [1]. Japan imports over 90 percent of its crude oil from the Middle East, making it highly vulnerable to disruptions in the Strait of Hormuz, which have led to sharp increases in crude oil prices since the conflict began [1].
CONCLUSION
Japan's release of oil reserves is a significant move to mitigate supply disruptions and price surges caused by the Middle East conflict and the closure of the Strait of Hormuz. The coordinated action with the IEA and reduction in reserve requirements signal a proactive approach to stabilizing energy markets. The market impact is high, with oil prices already reacting strongly to the ongoing geopolitical tensions.