Japan Taps Oil Reserves as Middle East Conflict Disrupts Global Energy Markets

Japan will begin releasing 80 million barrels from its strategic oil reserves Monday to counter supply disruptions from the U.S.-Israeli conflict with Iran. The move represents a 17% reduction in Japan's national reserves and comes as gasoline prices rise due to blocked shipments through the Strait of Hormuz.

Japan will begin drawing from its strategic petroleum reserves Monday in response to supply disruptions caused by the ongoing U.S.-Israeli conflict with Iran, marking the first time since the Ukraine crisis that Tokyo has accessed these emergency stockpiles.

The island nation plans to release a historic 80 million barrels of crude oil – equivalent to approximately 45 days of domestic consumption – as fuel costs climb nationwide due to interrupted shipments through the critical Strait of Hormuz waterway.

This drawdown will decrease Japan’s national petroleum reserves by 17 percent, with officials directing domestic refineries to utilize the released crude to maintain adequate fuel supplies across the country. The action is part of a broader 400-million-barrel global release coordinated through the International Energy Agency aimed at stabilizing markets amid wartime volatility.

According to Yuriy Humber, who heads the Tokyo-based Yuri Group consulting firm, Japan’s decision reflects the severity of current supply concerns.

“The reserves can help stabilise supplies and prices in the short term but they mainly buy time. They can’t fully offset a prolonged disruption in the Strait of Hormuz,” Humber explained.

The Ministry of Economy, Trade and Industry indicated that an additional 12 million barrels held jointly by Saudi Arabia, the United Arab Emirates, and Kuwait within Japan could also be released beyond the announced 80 million barrels.

Japan established its emergency oil stockpiling program in 1978 following the Arab oil embargo crisis of the mid-1970s. The G7 member nation, which depends on Middle Eastern sources for roughly 90 percent of its petroleum needs, currently maintains reserves sufficient for 254 days of consumption.

Beginning Monday, Japan will tap private sector reserves equivalent to 15 days of usage, followed by state stockpiles representing one month’s supply starting later this month, METI officials confirmed.

As companies prepare to access these emergency supplies, METI Minister Ryosei Akazawa noted efforts to secure alternative sources from the United States, Central Asian nations, South American producers, and Gulf states with shipping routes that avoid the Strait of Hormuz chokepoint.

Currently, the U.S. provides approximately 4 percent of Japan’s oil imports, with purchases increasing after Tokyo largely ceased Russian energy imports following Moscow’s 2022 invasion of Ukraine – the previous occasion when Japan accessed its strategic reserves.

U.S. Environmental Protection Agency Administrator Lee Zeldin emphasized America’s role as an alternative supplier during the current crisis.

“When you look at the conflict in the Middle East … you’re reminded of all that crude oil that has gone from Alaska to Japan was never targeted with a successful terrorist attack,” Zeldin told Reuters.

“This conflict … is a reminder that along the Indo-Pacific, a lot of other nations can look to the United States, where we have the resources,” he added.