Japan begins release of oil reserves as Iran war sparks energy crisis

Japan has begun releasing oil from its emergency reserves amid the global energy crisis sparked by the effective closure of the Strait of Hormuz by Iran in response to US-Israeli attacks.

The release was announced on Monday in a notice published in the Japanese government’s official gazette.

Japanese Prime Minister Sanae Takaichi last week announced plans to unilaterally release 80 million barrels of oil from stockpiles amid supply concerns due to Iran’s threats against shipping in the strait.

Takaichi announced the move shortly before the International Energy Agency (IEA) said it would coordinate the release of a record 400 million barrels to help cushion the market from the widening fallout of the United States and Israel’s war with Iran.

Despite the announcement by the Paris-based IEA, oil prices have repeatedly jumped above $100 a barrel during the past week as traders weigh the prospect of prolonged disruption to the critical waterway.

Analysts say prices are likely to continue to rise as long as shipping through the strait, which normally transports about one-fifth of the global oil supply, remains effectively halted.

Tokyo said on Monday that it had no plans to deploy its navy to the strait after US President Donald Trump called on other countries to help unblock the waterway.

Brent crude, the most important benchmark for global prices, rose as much as 3 percent on Sunday, before easing slightly on Monday.

Brent stood at $104.85 a barrel as of 05:45 GMT, up more than 40 percent since the start of the war on February 28.

Japan is one of the world’s largest oil importers, relying on fossil fuels from overseas for about 80 percent of its energy needs.

The East Asian country also has one of the world’s largest oil reserves, with enough supply to meet 254 days of domestic consumption.