TOKYO. For the first time, Japan is considering freeing oil from its reserves to contain the rise in oil prices, Kyodo news agency reported on Saturday, as Prime Minister Fumio Kishida expressed a willingness to counter the oil price surge at the request of the United States.
However, it may be difficult for Japan to justify such a move, since, under its own laws, the country can only release reserves during times of supply constraints or natural disasters, not to reduce prices.
The administration of US President Joe Biden, which is facing declining approval ratings and rising gasoline prices, has forced some of the world’s largest economies to consider freeing oil from their strategic reserves to contain high energy prices.
The requests include asking China to consider releasing its crude oil reserves for the first time.
“We are looking at what we can do from a legal point of view, assuming that Japan will coordinate with the United States and other interested countries,” Kishida told reporters.
“We want to draw a conclusion after carefully examining the situation that each country faces and what Japan can do.”
In the past, Japan has used its reserves to deal with the aftermath of the Gulf War in the early 1990s and the deadly earthquake and tsunami in 2011.
Chief Cabinet Secretary Hirokazu Matsuno said on Thursday that Tokyo is closely monitoring the impact of rising oil prices on the world’s third largest economy.
“By encouraging oil-producing countries to increase oil production, we will strive to stabilize energy markets by coordinating with major consumer countries and international organizations such as the IEA (International Energy Agency),” Matsuno said.
Resource-poor Japan gets most of its oil from the Middle East. The recent rise in oil prices and the weakening of the yen are driving up the cost of imports, double-hitting the trade-dependent country.
On Friday, the Kishida government unveiled a record $ 490 billion stimulus plan, including measures to counter rising oil prices. He plans to subsidize refineries in the hopes of caping wholesale gasoline and fuel prices to ease the pain of rising oil prices for households and companies.
“It is important to convince oil-producing countries to increase oil production,” Kishida said last month after talks with cabinet members. “We will take concrete action after confirming which industries are affected.”
Author: Tetsushi Kazimoto