December 4, 2022

Japan works to release oil reserves after US request – Sources

A branch of Cosmo Energy Holdings’ Cosmo Oil Service Station was found on December 17, 2015 in Tokyo, Japan. Picture taken on December 17, 2015. REUTERS / Yuya Shino / File Photo

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TOKYO, Nov. 22 (Reuters) – Four government sources told Reuters that Japanese authorities were working with other major economies to reduce restrictions on the release of national crude oil reserves.

Although Prime Minister Fumio Kishida has signaled his readiness for the weekend following Washington’s request, the world’s fourth-largest oil buyer, with its reserves – both private and public equities – banned from operating – will only use it in general. In times of scarcity.

One source said the government was considering releasing part of the state-owned stock outside of the minimum amount required as a legal settlement.

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Officials are also looking at private equity, which is part of the national reserve, with some advisers arguing that it could be released without restrictions, a second source said.

A third source told Reuters that “we have no choice but to bring something” after the US request. All sources declined to be identified as the plan was not made public.

Chief Cabinet Secretary Hirokasu Matsuno said nothing had been decided on Monday, while Kishida said on Saturday that the government would consider what it could do legally. read more

“We need to change our law, it will take time. But some argue that private reserves could be released,” the second source said.

“We need to expand the definition so they can be released,” the official said, adding that no tender was forthcoming.

Traders said no announcement had been made about the tender.

Japanese private companies, including refineries, hold about 175 million barrels of crude and oil products as part of a strategic petroleum reserve (SPR), which is enough for 90 days, according to Jokmek, the state-owned company that manages SPR and handles post-policy issues. Decided.

During the 1991 Gulf War and the 2011 earthquake and tsunami disaster, oil companies’ reserves were reduced. According to Fereidun Fesharaki, head of Facts Global Energy, part of the state in the SPR has never been used and there are “ridiculously” large amounts of petroleum stocks in Japan.

“There is no way the Japanese government can do anything until the United States asks,” Fesharaki said in a telephone interview.

Fesharaki said the resource-poor country was more focused on maintaining reserves between the bureaucracy that existed during the oil crisis of the 1970s and 1980s. “There will be no change until that team dies.”

Brent crude recovered from previous losses and rose about 0.5% after falling on Friday, citing forthcoming locks in Europe over oil release plans.

Biden did the administration Extraordinary request Other major economies need to consider releasing oil from their strategic reserves as higher prices begin to generate unnecessary inflation and begin to undermine the recovery from the Covit-19 epidemic.

Citing government sources, the Yomiuri newspaper said Japan and the United States would coordinate the announcement of the release of oil reserves earlier this week.

Japan’s oil reserves had a daily petroleum consumption of 145 days at the end of September, and, according to official data, exceeded at least 90 days by law.

The total value of 90 days in the private sector exceeds the minimum requirement of 70 days.

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Report by Yoshifumi Takemoto, Ritsuko Shimizu and Aaron Sheldrick; Writing and additional reporting of Contoro Gomia; Editing Song-Ron Kim, Jacqueline Wong and Louise Heavens

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