The breakdown will see Japan release 15 days worth of private sector oil reserves and one-month worth of state oil reserves. At the same time, Takaichi has also called on measures to curb gasoline prices at ¥170 per litre on average.
For some context, Japan has a massive buffer of around 254 days’ worth of oil in its reserves capacity. However, they are bound by the IEA coordination rule, which requires countries to maintain a minimum of 90 days of net oil imports as emergency reserves.
Their reserves capacity are spread out among ten national oil stockpiles that are either managed by the Japan Energy and Metals National Corporation (JOGMEC) and privately operated stockpiles. So, that sort of explains the headline mix for more clarity.
In any case, their move will also tie to the impending IEA announcement coming up later in the day.
One has to wonder though that if this is all done and prove to be a temporary stopgap measure as the conflict rages on, what is there left to really put a cap on oil prices? The hope here is that the eventual supply flood will help to suppress prices long enough for the war to end. But if the Strait of Hormuz continues to be disrupted alongside other key energy facilities in the region, it’s only a matter of time before the chaos resumes.
