JUNTARO ARAI, Nikkei staff writer
TOKYO — Japan is considering releasing more oil from its reserves in coordination with the U.S. and other countries, a government source told Nikkei, as the Russian invasion of Ukraine exerts upward pressure on global crude prices.
Front-month contracts for North Sea Brent topped $100 per barrel in London on Thursday, as concerns grow that the military conflict could disrupt crude shipments from Russia. An escalation in Ukraine could drive a further price surge.
The International Energy Agency is expected to begin talks soon with member nations such as Japan, the U.S. and the U.K. regarding the crisis. Japan plans to respond should the IEA call for a coordinated release of oil.
The U.S. has also signaled that it is ready to act. Releasing more oil “is certainly an option on the table,” White House spokesperson Jen Psaki said Wednesday.
Japan held 146 days’ worth of oil in its national reserves as of the end of December, according to the Ministry of Economy, Trade and Industry. Private-sector distributors held another 92 days’ worth in their government-mandated stockpiles.
Tokyo looks to tap private-sector reserves, which can be deployed more easily, in response to any request by the IEA. Japan released three days’ worth of private-sector stockpiles back in 2011, when the IEA coordinated a release in response to a disruption in the global oil supply amid unrest in Libya.
The U.S. had also decided to release reserves in November independently from the IEA in coordination with Japan, South Korea and other countries. Japan, in response, has been releasing older supplies that were slated for sale in fiscal 2022 ahead of schedule.