Japanese Prime Minister confirms that oil reserves may be released to keep prices down

Kyodo News reported on Saturday as Prime Minister Fumio Kishida showed that he was ready to counter the rise in oil prices at the request of the United States.

However, Japan struggles to justify such a move, as under its own law, reserves can only be released in the event of supply constraints or natural disasters, and prices cannot be lowered. There is a possibility.

Faced with lower approval rates and rising gasoline prices, President Joe Biden’s U.S. administration is considering releasing oil from strategic stockpiles to some of the world’s largest economies to quell high energy prices. I put pressure on you.

The request includes asking China to consider releasing its crude oil inventory for the first time.

“We are considering what we can do legally, given that Japan is coordinating with the United States and other countries concerned,” Fumio Kishida told reporters.

“I would like to draw a conclusion after carefully considering the situation facing each country and what Japan can do.”

Japan has used its reserves in the past to cope with the collapse of the Gulf War in the early 1990s and the deadly earthquakes and tsunamis of 2011.

Chief Cabinet Secretary Hirokazu Matsuno said Thursday that Tokyo is closely watching the impact of rising oil prices on the world’s third-largest economy.

“While encouraging oil-producing countries to increase oil production, we will work with major consuming countries and international organizations such as the IEA (International Energy Agency) to stabilize the energy market,” Matsuno said.

Japan, which is scarce in resources, obtains most of its oil from the Middle East. The recent rise in crude oil prices and the depreciation of the yen have pushed up import costs and have double-hit trade-dependent countries.

The Fumio Kishida administration announced a record $ 490 billion stimulus package on Friday, including measures to combat high oil prices. We plan to subsidize oil refiners in the hope of capping wholesale prices for gasoline and fuel to ease the pain of families and businesses due to rising oil prices.

“The important thing is to encourage oil-producing countries to expand oil production,” Prime Minister Fumio Kishida said in a meeting with ministers last month. “After confirming which industry sector is affected, we will take concrete measures.”

Tetsushi Kajimoto