The third largest strategic crude oil reserve in the world! Is Japan about to

# Zhao Ying

Source: Wallstreetcn

The Strait of Hormuz is effectively closed, cutting off **95% of Japan’s crude oil lifeline from the Middle East**. According to Reuters, Japan has ordered a state of readiness at the Shibushi National Oil Reserve Base in Kagoshima, sending an unprecedented signal of potential stockpile release. Even more shocking to the market: **Japan may release reserves unilaterally, bypassing the IEA and independent of U.S. coordination** — a historic shift in its post‑war energy policy.

As the Iran crisis continues to disrupt global energy supplies, Japan stands on the verge of releasing its strategic petroleum reserves (SPR).

Reuters reported on Sunday that Akira Nagatsuma, an opposition lawmaker in Japan, said the government had instructed the Shibushi National Oil Reserve Base in Kagoshima Prefecture to prepare for a possible crude oil release. This is the clearest official signal so far that Japan may tap its reserves.

Javier Blas, Bloomberg’s energy and commodities columnist, promptly posted on X that Japan could act within 24 hours and **may do so unilaterally, without coordination with the U.S. or the International Energy Agency (IEA)**.

Japan holds the world’s third‑largest strategic oil reserves, after China and the United States. If it releases reserves now, it will be the first time since the 2022 Russia‑Ukraine conflict and **the first time Japan has ever considered an independent release outside the IEA coordination framework**.

Separately, Japanese Prime Minister Sanae Takaichi stated on Monday that the government would take steps to diversify crude oil procurement sources. Authorities are considering using reserve funds to prevent gasoline prices from rising to unaffordable levels for households. She added that no additional budget measures were being considered, as reserve funds remained available in the fiscal 2025 and 2026 budgets. Japan has not received any proposals from the U.S. to further raise its defense budget relative to GDP.

## Strait of Hormuz closure puts Japan’s supply chain in crisis

The immediate trigger for the stockpile debate is the disruption of Middle Eastern crude supplies caused by the Iran crisis.

Japan imports roughly **95% of its crude oil from the Middle East**, with about 70% passing through the Strait of Hormuz, according to Reuters. Following the U.S. and Israeli attacks on Iran, the strait has been effectively shut down, putting severe pressure on Japan’s crude supply chain.

Against this backdrop, Japan’s Agency for Natural Resources and Energy (ANRE), under the Ministry of Economy, Trade and Industry (METI), issued a readiness order to the Shibushi National Oil Reserve Base last Friday.

Officials from Japan Organization for Metals and Energy Security (JOGMEC), which manages the base, confirmed the order to Nagatsuma.

However, Nagatsuma noted that details such as the exact timing of the release remained unclear, and it was unknown whether other reserve bases had received similar instructions.

Economy Minister Ryosei Akazawa said earlier last week that there were no concrete plans to release oil reserves, but authorities would closely monitor supply conditions and maintain coordination with the IEA.

However, Kyodo News reported on Friday that the Japanese government was considering tapping part of its national oil reserves, possibly in coordination with other countries or even **unilaterally**.

## Large reserve on paper, but severed supply lines change everything

Japan’s strategic petroleum reserves are globally significant, but their actual buffer capacity is being questioned.

Citing official data, Javier Blas reported that the Japanese government holds about **260 million barrels** of crude oil reserves across 10 storage facilities, including above‑ground tanks, underground caverns, floating tanks, and rock caverns.

Japan also mandates private‑sector oil inventories and has joint storage agreements with Saudi Arabia, the UAE, and Kuwait, contributing an additional ~178 million barrels.

Combining government, private, and joint reserves, Japan’s total oil stockpile stands at about **440 million barrels**, equivalent to roughly **204 days of imports** — nearly matching the U.S. Strategic Petroleum Reserve (about 415 million barrels) in nominal size.

Nevertheless, commentators argue that the practical meaning of this figure must be re‑evaluated.

With **95% of crude supplies flowing through the Strait of Hormuz**, once the supply route is cut, 204 days of reserves cease to be a cushion and become a hard countdown.

## Japan may act unilaterally, bypassing the IEA

The most market‑focused signal in this debate is that Japan may choose to release reserves **independently, without IEA coordination**.

Javier Blas emphasized clearly on X:

> “The real story to watch is Tokyo acting alone, without U.S. coordination.”

This marks a sharp contrast to past practice.

Japan’s last SPR release was in 2022, as part of an IEA‑coordinated release to counter the energy market shock from the Ukraine war.

A unilateral move by Japan this time would represent an important shift in its post‑war energy policy and send a strong independent signal to the market about how seriously Japan views the severity of the current supply crisis.

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