Japan announced on Friday that it would release 6 million barrels of crude oil from its private reserves as part of the International Energy Agency's plan to release 120 million barrels of crude oil to ease the price of crude.
Japan is set to release a total of 15 million barrels as part of the IEA's stockpile release. The remaining 9 million barrels will come from Japan's state reserves, although Japan has not yet disclosed the timing and method of release.
Japan will achieve the 6 million barrel release by letting local refiners reduce their private stockpiles by three days' worth of domestic demand-leaving the refiners with a new requirement of 63 days. The shift in reserve requirements will be valid from April 16 to October 18.
According to Reuters, Japan had 470 million barrels of crude in reserves at the end of January, or 236 days' worth, which includes both state-held reserves as well as privately held reserves.
Japan's biggest refiner, Eneos Holdings, halted crude oil purchases from Russia weeks ago, although some cargoes of Russian crude purchased earlier are finally making their way to Japan now. Idemitsu Kosan also halted Russian crude purchases, citing logistics and payment disruptions due to sanctions.
Prior to the invasion, Japan imported a little more than 4% of imported crude oil from Russia.
The IEA agreed earlier in April to release the second batch of crude oil from members' stockpiles. Half of the 120 million barrels agreed to is set to come from the United States.
Brent crude is still trading above $111 per barrel despite the announced release, while WTI is trading over $106 as the EU works on a plan to stop purchases of Russian crude oil in the coming months.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More