Tokyo, Nov 24, : Fumio Kishida, Japan’s Prime Minister, stated Wednesday that the country would release oil.This would be the first time the resource-poor country has attempted to reduce prices by tapping its reserves. Kishida stated that Japan has decided to work in tandem with the United States, and sell a portion the state-owned stockspiles in a way that does not violate the oil storage law.
According to Xinhua news agency, the oil stockpiling law restricts oil release to respond to disasters or overseas political turmoil.
Tokyo will not release oil reserves exceeding its 160 day storage limit in order to comply with the law.According to a government official, the amount of oil that will be released initially is equivalent to several days’ consumption.
The White House announced Tuesday that the US would release 50 million barrels oil from its emergency reserves to help address rising prices.This was in coordination with other major energy-consuming nations.Other countries are expected to follow suit.
Oil prices rose in New York and Tokyo overnight, but there were doubts about the effectiveness of this move, as the oil released is only worth a few days of consumption.
Japan’s decision to build reserves in the past was made to solve supply issues after natural disasters or political turmoil.
The country has so far implemented five releases, including those following the Gulf War in early 1990s, the March 2011 earthquake, tsunami, and subsequent Gulf War.
Japan is a member of International Energy Agency and must maintain oil reserves equal to 90 days net imports in the preceding year.Private emergency reserves should not exceed 70 days of Japan’s oil consumption in the preceding year.
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