Japan has kicked off a sale of oil from its strategic reserves to combat rising prices with a modest sale, joining an unprecedented coordinated release of crude from strategic stockpiles that’s been led by the U.S.
A government tender offered Oman crude from the strategic reserves in Shibushi for delivery between March and June, the trade ministry said in a statement Monday. The move is part of Japan’s plans to sell oil in coordination with other consuming nations and more sales may follow, according to a ministry official, who declined to be identified because of internal policy.
The volume offered was 100,000 kiloliters, according to a second statement. That’s equivalent to about 630,000 barrels. In 2020, Japan consumed about 3.27 million barrels a day, according to figures from BP PLC.
The Biden administration started tapping the first of its pledged 50 million barrels of reserves not long after announcing the coordinated release in late November. South Korea said last week that it will start releasing crude and oil products from its strategic reserves next month, although other countries named as part of the plan — including China and India — have yet to act.
At present, there are signs of weakening oil demand in Asia given the rapid spread of the omicron variant of the coronavirus. Brent crude, the global benchmark, traded below $76 a barrel on Monday, and it’s down by about 7% since the U.S.-led plan was announced.
Trade minister Koichi Hagiuda said in November that Japan would conduct the release as it replaces oil in its stockpiles. While it does that regularly, the schedule has been moved up to support similar actions elsewhere, he added.