Asian allies seek oil, but Japan chooses to prioritize self-preservation! Japanese Minister of Trade: Strategic oil supply will be prioritized for domestic use.

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Continued disruption of shipping in the Strait of Hormuz is impacting Asia's energy supply. Japan has made it clear that its strategic petroleum reserves will primarily be used for domestic refiners, dashing the hopes of Asian countries such as the Philippines and Vietnam, which had sought assistance from Japan.

On March 27, according to Bloomberg, Japan’s Minister of Economy, Trade and Industry Ryosei Akazawa stated that the sale of strategic petroleum reserves would "in principle be directed towards domestic oil and refining companies", because, by law, these reserves are intended to ensure Japan’s own energy supply. However, he left some room and noted that the situation regarding jointly held reserves with oil-producing countries "may be different", and that judgments would be made based on specific circumstances.

This statement means that, as the Asian energy crisis intensifies, Japan will not be directly transferring national reserves to other Asian countries in the short term. The situation is particularly severe for the Philippines, which relies on oil imports from the Strait of Hormuz and has far smaller reserves than Japan. Ryosei Akazawa acknowledged that “Asia is facing an extremely difficult situation,” and emphasized that maintaining supply and demand balance in the Asian market is also vital for Japan’s own industrial supply chain.

Japan Activates Oil Reserve Release; Joint Reserves Become a Flexible Variable

According to Bloomberg, Japan has begun releasing oil stockpiles this month to ease supply tensions caused by the effective blockade of the Strait of Hormuz. This strait is a key route for Japan’s crude oil imports. Earlier this week, Japanese Prime Minister Sanae Takaichi discussed with International Energy Agency (IEA) Director Fatih Birol the possibility of coordinating additional reserve releases if necessary.

Japan’s strategic petroleum reserves are composed of three parts: national reserves, reserves held by private companies, and joint reserves held with oil-producing countries such as Saudi Arabia, the UAE, and Kuwait. As of January this year, these three types of reserves were equivalent to 144, 99, and 8 days of consumption, respectively. The joint reserves are the smallest in scale, and the “may be different” flexibility mentioned by Akazawa mainly refers to this portion.

Seeking Alternative Supplies Through Multiple Channels

While tapping into reserves, Japan is also actively seeking alternative oil sources. According to Bloomberg, citing Japanese media, Inpex Corp, Japan’s largest oil and gas exploration and production company, plans to prioritize supplying Japanese buyers with crude oil from its Central Asian oilfield interests. Akazawa did not comment on this, but said it is “reasonable” for Japanese private firms to focus on Central Asia, given that Japan has previously imported from Kazakhstan and Azerbaijan.

Meanwhile, after a summit with U.S. President Trump on March 19, Prime Minister Sanae Takaichi said she hoped to increase imports of U.S. energy, including exploring the possibility of establishing a U.S. oil reserve in Japan. Japan is currently subsidizing retail gasoline prices to keep them at about 170 yen per liter to ease the burden on residents.

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