Four government sources with knowledge of the plans announced that Japanese authorities are working on methods to get past limits on releasing national stocks of crude oil in coordination with other big nations to reduce prices.
While Prime Minister Fumio Kishida indicated his preparedness over the weekend in response to a request from Washington, the world’s fourth-largest oil consumer is limited in how it may utilize its reserves, which are made up of both private and public inventories and are normally only used in times of scarcity.
As a legal workaround, one of the sources said the government was considering releasing a part of the state-held equities that was less than the minimum amount necessary. Officials are also considering private stocks held by the national reserve, which some experts think may be distributed without limits. Following a request from the US, “we have no choice but to come up with something,” sources added, as the plan has not been made public, all of the sources declined to be identified. Hirokazu Matsuno, the Chief Cabinet Secretary, said on Monday that nothing had been determined, while Kishida indicated on Saturday that the government was studying what it could do legally.
Japanese authorities decide on oil release
“We’d have to amend our laws, which would take some time. However, others argue that private stockpiles should be revealed “According to the sources. “We need to broaden the criteria so they may be released,” the official said, adding that there will be no tender. Traders said they had not been notified of a tender.
According to state agency Jogmec, which manages the SPR and oversees releases when policies are set, Japanese private enterprises, including refiners, retain around 175 million barrels of crude and oil products in the Strategic Petroleum Reserve (SPR), enough for around 90 days’ usage.
During the 1991 Gulf War and in the aftermath of the 2011 earthquake and tsunami tragedies, oil corporations’ reserves were depleted. According to Fereidun Fesharaki, chairman of Facts Global Energy, the state’s contribution to the SPR has never been used, and Japan has an “absurd” quantity of petroleum stockpiles on hand.