Japan will begin releasing oil from its state reserves on Thursday, as announced by Prime Minister Sanae Takaichi, in response to mounting supply concerns and surging oil prices caused by the ongoing U.S.-Israeli war with Iran [1]. This decision follows the release of oil from private-sector stockpiles last week and is part of broader efforts to cushion the impact of Middle East tensions on the Japanese economy [1]. The government plans to sell approximately 8.5 million kiloliters of oil from its reserves, distributed across 11 storage bases nationwide, according to the Ministry of Economy, Trade and Industry [1]. Additionally, joint oil reserves belonging to Middle Eastern nations stored in Japan will be tapped by the end of the month [1].
Prime Minister Takaichi emphasized the importance of peace and stability in the Middle East for both Japan and the international community, stating that Tokyo will continue diplomatic efforts in close coordination with related countries to minimize economic disruption [1]. Japan relies on the Middle East for over 90 percent of its crude oil imports, most of which pass through the Strait of Hormuz—a key waterway that has been effectively closed by Iran since the conflict began in late February, resulting in a surge in crude oil prices [1].
The Cabinet has allocated 800.7 billion yen ($5 billion) from the current fiscal year's budget, including 794.8 billion yen for a fund to finance subsidies aimed at curbing the rise in gasoline prices [1]. Regular gasoline prices reached an all-time high of 190.80 yen per liter last week [1]. The government is also examining potential economic ramifications, such as a drop in domestic ethylene output and the need to diversify crude oil suppliers [1].
Ahead of a joint release led by the International Energy Agency, Takaichi previously stated that Japan would unilaterally begin freeing up 15 days' worth of private-sector reserves from March 16, followed by a month's worth of state-held oil [1]. U.S. President Donald Trump and Takaichi affirmed the importance of stable energy supplies and safe navigation in the Strait of Hormuz during their summit in Washington last Thursday [1]. Trump has expressed eagerness to resolve the conflict through dialogue, noting "major points of agreement" in negotiations between the United States and Iran, though Tehran has denied participating in any talks [1].
CONCLUSION
Japan's release of state oil reserves and allocation of subsidies represent decisive measures to address supply disruptions and record-high gasoline prices amid Middle East tensions. The government's actions are expected to provide short-term relief to the domestic market, while ongoing diplomatic efforts aim to secure stable energy supplies. Market participants will closely monitor the effectiveness of these interventions and any developments in the regional conflict.