Japan to start releasing 6 mil barrels private oil reserves in IEA joint effort

Japan will start on April 16 releasing 6 million barrels of oil from privately-held petroleum reserves as part of its 15 million barrels release in its joint effort with the International Energy Agency, the Ministry of Economy, Trade and Industry said April 15.

Japan's 6 million barrels of oil release will be made by allowing local refiners and oil products importers to lower their stockpiles in the privately-held reserves by three days over April 16-Oct. 8, METI said in a statement.

The move follows Japan's April 7 announcement to release a total of 15 million barrels, including from the national oil reserves for the IEA's largest ever stock release of 120 million barrels.

Although Japan has not disclosed how it will release the remaining 9 million barrels of oil from the national petroleum reserves, it will be the first such release under the country's petroleum stockpiling law since the reserves were established in 1978.

Together with its earlier release of 7.5 million barrels crude and oil products from privately-held petroleum reserves, or four days of the stockpile requirements, Japan will lower the requirements by a total of 13.5 million barrels or seven days.

Japan extended April 8 its previous release of 7.5 million barrels of crude and oil products from privately-held petroleum reserves by six months to Oct. 8 in response to a recent request from the IEA amid the prolonged Ukraine war, according to a METI source.

The latest IEA move comes after the US pledged in the week ended April 2 to tap 180 million barrels of oil, effectively releasing 1 million b/d for six months from May, in a bid to alleviate market concerns over potential shortages from a drop in Russian oil exports.

The IEA also clarified April 7 that over the next six months, around 240 million barrels of emergency oil stocks -- the equivalent of well over 1 million b/d -- will be made available to the global market.

That implies the total release would include the 62.7 million barrels announced by the IEA on March 9, 30 million barrels of which is coming from the US.

At end-February, Japan held a total of around 469.09 million barrels of petroleum reserves, equating to 234 days of domestic consumption, comprising national petroleum reserves, oil reserves held by the private sector and a joint crude oil storage program with oil-producing countries, according to METI data released April 15.

Crude stocks in the national oil reserves accounted for 286.06 million barrels of the total, while oil products in the national reserves comprised another 8.99 million barrels.

Privately-held crude reserves totaled 78.31 million barrels, with oil products stocks at 89.57 million barrels, while 6.29 million barrels of crude were held by oil producers in Japan.