Asian allies seek oil, Japan chooses to prioritize self-preservation first! Japan's Minister of Trade: Ensuring domestic supply of strategic oil is the top priority

The disruption of shipping in the Strait of Hormuz continues to impact energy supplies in Asia, and Japan has made it clear that its strategic oil reserves will primarily be used for domestic refiners, leaving Asian countries like the Philippines and Vietnam, which are seeking assistance from Japan, with little hope.

On March 27, according to Bloomberg, Japan’s Minister of Economy, Trade and Industry, Ryosei Akazawa, stated that “the sales of strategic oil reserves are primarily targeted at domestic oil and refining companies,” as these reserves are legally established to ensure Japan’s own energy supply. He also left room for interpretation, pointing out that the situation regarding joint reserves held with oil-producing countries “may differ,” and decisions will be made based on specific circumstances.

This statement means that, amid the escalating energy crisis in Asia, Japan will not be directly supplying national reserves to other Asian countries in the short term. The situation is particularly severe for the Philippines, which relies on oil imported through the Strait of Hormuz and has reserves far smaller than those of Japan. Akazawa acknowledged that “Asia is facing an extremely difficult situation,” emphasizing that maintaining the supply-demand balance in the Asian market is also crucial for Japan’s own industrial supply chain.

Japan Starts Releasing Oil Reserves; Joint Reserves Become Flexible Adjustment Variable

According to Bloomberg, Japan has begun releasing oil stocks this month to ease the supply tightness caused by the effective blockade of the Strait of Hormuz. This strait is a key route for Japan’s crude oil imports. Earlier this week, Japanese Prime Minister Fumio Kishida discussed the possibility of coordinating the release of additional reserves if necessary during talks with International Energy Agency (IEA) Director Fatih Birol.

Japan’s strategic oil reserves consist of three parts: national reserves, private enterprise reserves, and joint reserves held in conjunction with oil-producing countries like Saudi Arabia, the UAE, and Kuwait. As of January this year, the three types of reserves correspond to 144 days, 99 days, and 8 days of oil consumption, respectively. The joint reserves are the smallest, and the “may differ” flexibility mentioned by Akazawa primarily refers to this portion of the reserves.

Seeking Alternative Supplies Through Multiple Channels

While utilizing reserves, Japan is also actively exploring alternative oil sources. According to reports from Japanese media cited by Bloomberg, Japan’s largest oil and gas exploration and development company, Inpex Corp, plans to prioritize supplying crude oil from its holdings in Central Asian oil fields to Japanese buyers. Akazawa did not comment on this but noted that it is “reasonable” for Japanese private enterprises to focus on Central Asia, as the country has previously imported from Kazakhstan and Azerbaijan.

Meanwhile, after a summit with U.S. President Trump on March 19, Kishida expressed hopes to expand energy imports from the United States, including exploring the possibility of establishing U.S. oil reserves in Japan. Japan is maintaining retail gasoline prices at around 170 yen per liter through subsidies to ease the burden on residents.

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