Japan is weighing the idea to release in May another batch of oil stocks from reserves to provide about 20 days of oil consumption, amid continued uncertainty about tanker transits through the Strait of Hormuz, Kyodo News reported on Thursday, citing a source close to the deliberations.
Japan, which depends on Middle Eastern oil supply for about 95% of its oil supply, began releasing oil stocks from national reserves at the end of March, as part of the IEA-coordinated record-high release of 400 million barrels of oil and fuel. Japan is releasing a total of 80 million barrels of oil stocks, including 54 million barrels of crude and 26 million barrels of oil products as part of the IEA’s 400-million-barrel release.
At the time in which Japan first tapped its stocks, Japan’s Prime Minister Sanae Takaichi asked Fatih Birol, the executive director of the IEA, to be ready for an additional release of oil stocks from reserves if it is necessary.
Japan is particularly vulnerable to the worst supply disruption in the history of oil markets as 95% of its oil imports typically come from the Middle East, and via the Strait of Hormuz.
The U.S.-Iran ceasefire has not resulted in the immediate opening of the Strait of Hormuz as Iran continues to control the passage and details about security guarantees are still very limited.
Japan’s Takaichi on Wednesday called on Iran to swiftly secure safe passage for ships of all nations through the vital oil and gas chokepoint.
“I emphasized that the Strait of Hormuz is a key location for global logistics and an international public property,” Takaichi told a media briefing after a telephone call with Iranian President Masoud Pezeshkian.
“Coordination with Iranian armed forces is still required for all transits,” maritime intelligence firm Windward said on Wednesday, noting that “Transit conditions, toll arrangements, and the legal framework for passage remain undefined.”
“The strait has not reopened — it is in a supervised pause,” Windward added.
By Tsvetana Paraskova for Oilprice.com