TOKYO: Japan will release oil from its state reserves in a coordinated action with the United States and other countries to lower crude oil prices, Japanese Prime Minister KISHIDA Fumio said Wednesday.

“We’ve decided to sell part of our state oil reserves together with the United States in a way that is consistent with the oil reserves law,” Kishida told reporters at the prime minister’s office.

It will be the first time for Japan to tap its state oil reserves to respond to high oil prices. The government is considering conducting an auction as early as this year to sell several days’ worth of oil from the reserves, sources familiar with the matter said. 

Kishida’s announcement came after US President Joe Biden said at the White House Tuesday that the United States will release oil from the Strategic Petroleum Reserve.

Biden said Japan, India, South Korea and Britain “have agreed to release additional oil from their reserves. And China may do more as well.” He said, “This coordinated action will help us deal with the lack of supply, which in turn helps ease prices.”

The United States plans to release 50 million barrels of oil from the reserves, equivalent to half of the world’s average daily consumption.

Japan’s oil stockpiles include state reserves and private-sector reserves. As of the end of September, the country had state reserves for 145 days, far above the government’s target.

Previously, oil from private-sector reserves were released to alleviate supply concerns after national disasters and political turmoil in the Middle East.

The planned release from the state reserves requires no law revision as it involves the sale of surplus oil.

Japan sells oil on Asia’s spot market regularly to replace oil varieties in the reserves, according to the economy ministry. The government is considering a similar way to release oil flexibly, the sources said.

At a press conference, Japan’s Chief Cabinet Secretary Hirokazu Matsuno said that the government will continue to urge oil producing countries to increase output.

“We’ll steadily implement measures to cushion the impact of surging gasoline and kerosene prices,” Matsuno said, referring to a plan to provide subsidies to oil wholesalers to lower prices.

JIJI Press