Japan begins release of oil reserves as Iran war sparks energy crisis | Oil and Gas News

Tokyo’s move comes amid rising oil prices amid the effective closure of the Strait of Hormuz.

Japan has begun releasing oil from its emergency reserves amid a global energy crisis by effectively closing the Strait of Hormuz from Iran in response to US-Israeli attacks.

The release was announced on Monday in an announcement published in the Japanese government’s official gazette.

Japanese Prime Minister Sanae Takaichi last week announced plans to unilaterally release 80 million barrels of oil from stockpiles amid supply concerns due to Iranian threats against shipping in the strait.

Takaichi announced the move shortly before the International Energy Agency (IEA) said it would coordinate the release of a record 400 million barrels to help cushion the market from the wider fallout from Israel’s war with the United States and Iran.

Despite the announcement by the Paris-based IEA, oil prices have jumped above $100 a barrel in the past week as traders weigh the prospect of a prolonged disruption to the critical waterway.

Analysts say prices are likely to rise until shipping through the strait, which normally carries about a fifth of global oil supplies, is effectively shut down.

Tokyo said on Monday it had no plans to deploy its navy to the strait after US President Donald Trump called on other countries to help unblock the waterway.

Brent crude, a key benchmark for global prices, rose 3 percent on Sunday before easing slightly on Monday.

Brent was at $104.85 a barrel as of 05:45 GMT, up more than 40 percent since the war began on February 28.

Japan is one of the world’s largest oil importers, relying on overseas fossil fuels for nearly 80 percent of its energy needs.

The East Asian country has one of the world’s largest oil reserves, with enough supply to meet 254 days of domestic consumption.