Japan to Use Strategic Oil Reserve to Prevent Price Surge

Japanese Prime Minister Sanae Takaichi announced Friday that Japan will independently tap into its national strategic petroleum reserves as early as Monday, citing escalating conflicts in the Middle East that threaten to disrupt global supply chains and drive up domestic inflation.

Breaking from standard protocol, Takaichi told foreign media that Tokyo will act unilaterally rather than waiting for a coordinated release authorized by the International Energy Agency (IEA). The preemptive move underscores the government's growing alarm over shipping disruptions and the potential for runaway energy costs to damage Japan's broader economy.

Strait of Hormuz Shipping Risks

Japan's swift intervention is driven by its highly vulnerable energy infrastructure. More than 90% of Japan's crude oil imports originate in the Middle East. The vast majority of these shipments must transit the Strait of Hormuz—a strategically sensitive maritime chokepoint where shipping risks have surged amid the ongoing conflict involving Iran. （Related： Opinion | The Middle East Crisis Is an Economic Problem, Not Just a Military One ｜ Latest ）

Strategic Reserve Drawdown

To prevent domestic shortages and suppress price surges, the government plans to inject a combined 45 days' worth of crude oil into the market. The drawdown includes both private-sector and government strategic reserves. 

Despite the near-term supply chain pressure, Japan maintains a substantial energy buffer. According to available figures, the country's combined government and private-sector strategic reserves currently hold enough crude oil to cover approximately 254 days of national consumption.

Price Subsidies and Economic Intervention

The decision comes as fuel costs begin to squeeze Japanese consumers. Recent data from Japan's Ministry of Economy, Trade and Industry (METI) shows the national average retail price of gasoline has climbed to 161.8 yen a liter (about $1.10)—crossing the 160-yen threshold for the first time in three months.

Takaichi warned that without immediate action, there is a severe risk of gasoline prices spiking to 200 yen a liter (about $1.36).

To shield the economy, the prime minister stated that authorities will implement forceful, direct interventions to cap the national average retail gasoline price at or below roughly 170 yen a liter (about $1.16). She confirmed that similar price control and subsidy measures will be extended to diesel, heavy oil, and kerosene. （Related： Opinion | The Middle East Crisis Is an Economic Problem, Not Just a Military One ｜ Latest ）