Japan's Minister of Trade announced that the country will sell oil from its national reserves based on price levels prior to the outbreak of the Middle East conflict. This week, the government officially declared it will release approximately 80 million barrels of crude oil from both state and private reserves, with the process potentially starting as early as next week. Minister of Economy, Trade and Industry Ryosei Akazawa stated on Friday that the selling price for this crude oil will be determined according to the Official Selling Price (OSP) levels set by Middle Eastern oil producers before the war. According to execution details disclosed by the Japanese government, the total planned release amounts to about 80 million barrels, equivalent to 45 days of Japan's total national oil consumption. The release strategy will be implemented in two phases: the first phase will involve releasing commercial reserves from the private sector equivalent to 15 days of consumption, followed by a government-led release of national physical reserves equivalent to 30 days of consumption. The initial crude oil release is expected to commence as early as March 16, 2026. Prior to the war's outbreak on February 27, the global benchmark Brent crude closed at $72.48 per barrel. Since the conflict began, its price has climbed to around $101 per barrel. If the conflict is not resolved shortly and the Strait of Hormuz remains substantially blocked, oil prices could rise significantly further. Akazawa expressed the government's expectation that "refiners who purchase crude oil at lower prices will not resell the products at higher prices for personal gain." He added that the government "will maintain close communication with refiners to ensure the release of national reserve oil proceeds in a manner the public finds reasonable and convincing." The deep background for this emergency intervention stems from Japan's high dependence on Middle Eastern energy. Due to the escalation of military actions by the U.S. and Israel against Iran, transit through the Strait of Hormuz, a global energy chokepoint, has been obstructed. Japan relies on the Middle East for approximately 95% of its crude oil imports, with 90% of that volume needing to pass through the strait. In the early stages of the deteriorating situation, domestic fuel prices in Japan had already shown consecutive increases. Without timely intervention, soaring energy costs would severely impact Japanese manufacturing and household consumption. Japan's unilateral release of national oil reserves coincides with the International Energy Agency's coordinated large-scale release of 400 million barrels of oil reserves by developed countries. The Paris-based agency described the energy crisis triggered by the Iran war as the most severe supply disruption event in the history of the global oil market. Akazawa did not entirely rule out the possibility, stating that if domestic demand is insufficient, surplus petroleum products refined from the reserve crude could potentially be exported overseas. "This measure does not include prohibitive regulations on exports," he said. Middle Eastern oil producers determine the Official Selling Price for crude oil under long-term contracts on a monthly basis. The OSP differs for various crude grades and is calculated by applying a differential adjustment to a set benchmark, combined with market conditions at the time of pricing.
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