Japan To Release 7.5 mil Barrels Oil From Private Reserves

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  • Allows refiners, importers to lower stockpile by 4 days until Apr 8
  • Japan’s oil release equates to 12.5% of IEA’s total oil release
  • Japan sells 2.26 mil barrels crude from national oil reserves

According to a recent article published in Platts, Japan has started releasing March 10 a total 7.5 million barrels of oil from privately-held petroleum reserves as part of its contribution to the International Energy Agency’s coordinated release of a total 60 million barrels to calm crude oil prices rattled by Russia’s invasion of Ukraine.

Barrels of crude and oil products

Japan is releasing 7.5 million barrels of crude and oil products, which equate to four days of mandatory stockpile volumes, by allowing local refiners and oil products importers to lower their stockpiles in the privately-held reserves by four days.

In its bulletin issued by the Minister of Economy, Trade and Industry Koichi Hagiuda March 10, Japan has allowed refiners, oil product importers to lower their mandatory crude and oil products stockpile volumes from March 10 until April 8.

During the 30-day period, Japan’s mandatory privately-held oil reserves volumes lowered to 66 days from 70 days as part of its coordinated oil release with the IEA.

Decision to cut volumes

Following the decision to cut the mandatory privately-held oil reserves volumes, METI requested the Japanese oil industry to cooperate with the oil release, Petroleum Association of Japan President Tsutomu Sugimori said.

The Japanese oil industry will cooperate the release as an effort to contribute toward stabilizing petroleum supply, Sugimori said in a statement.

Japan’s planned release equates to 12.5% of the worldwide total, and it is the second largest after the US’ release of 30 million barrels from its Strategic Petroleum Reserve under the joint IEA action.

Joint crude oil storage program

At end-2021, Japan held a total of around 484 million barrels of petroleum reserves, equating to 241 days of domestic consumption, comprising national petroleum reserves, oil reserves held by the private sector and a joint crude oil storage program with Saudi Arabia and Abu Dhabi, according to the latest METI data.

Crude stocks

Crude stocks in the national oil reserves accounted for 285.99 million barrels of the total while oil products in the national reserves comprised another 8.99 million barrels.

Privately-held crude reserves

Privately-held crude reserves totaled 78.30 million barrels, with oil products stocks at 102.90 million barrels, while 7.79 million barrels were held by Saudi Arabia and Abu Dhabi in Japan.

Crude sales

Japan on March 9 sold a total 260,000 kiloliters, or 1.64 million barrels, of Khafji and Hout crudes from its national petroleum reserves via public tenders, a METI official said March 10, as part of its joint efforts with the US and other countries to stabilize oil prices.

Khafji and Hout crudes

After selling the Khafji and Hout crudes produced in the Saudi Arabia-Kuwait Neutral Zone March 9, Japan has sold a total of about 360,000 kiloliters, or 2.26 million barrels, of crude from its national petroleum reserves.

2 shipments of Khafji crude

During March 9 tenders, Japan offered up to two shipments of Khafji crude, amounting to about 150,000 kiloliters, or 943,470 barrels, from ENEOS’ Kiire oil terminal in the southwest for delivery April 20-July 31.

Hout crude from oil storage

The country also offered in a separate tender one shipment of 110,000 kiloliters, or 691,878 barrels, of Hout crude from the Tomakomai-Tobu national oil storage terminal in northern Japan for delivery April 20-Aug. 20.

Japan’s planned crude sales

Japan’s latest planned crude sales from the national reserves came after it sold about 100,000 kiloliters, or 629,000 barrels, of Oman crude from the reserves via a Feb. 9 public tender.

Japan’s sales of national petroleum reserves was made by advancing its planned sales of crude for replacement in the national reserves without violating the country’s petroleum stockpiling law.

In recent years, Japan has been replacing medium and heavy crude stocks in the national petroleum reserves with lighter grades, reflecting the growing domestic demand for lighter oil products.

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Source: Platts

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