Japan plans to release 80 million barrels of oil reserves next week, selling at prices before the Middle East conflict.

The Japanese government announced that it will begin releasing approximately 80 million barrels of national and private strategic oil reserves as early as next week. This batch of crude oil will be sold based on the official selling price (OSP) of Middle Eastern oil-producing countries before the outbreak of the conflict.

On February 27, the eve of the full escalation of the Middle East conflict, global benchmark Brent crude oil closed at $72.48 per barrel. Since the outbreak of the conflict, prices have continued to rise and have now reached $101 per barrel. The market generally expects that if the Strait of Hormuz remains effectively closed and the situation does not ease, there will be further upward pressure on oil prices.

Against this backdrop, the “official selling price” (OSP) serving as the pricing benchmark for Japan’s oil release is attracting much attention. Typically, Middle Eastern oil-producing countries set the OSP for long-term contracts monthly, and the specific price varies by crude grade. The price is determined by adjusting price differentials based on the benchmark oil price and taking into account current market supply and demand conditions.

Japanese Minister of Economy, Trade and Industry, Ryoma Akazawa, explicitly warned domestic refiners on Friday that they must not profiteer from buying national reserve crude oil at low prices. He stated that the government will continue to communicate with the industry to ensure that this oil release proceeds in a manner “the public finds reasonable and convincing,” aiming to pass cost advantages on to end consumers.

Meanwhile, Akazawa left room for the export of refined oil products processed from reserve crude, stating that if domestic demand is insufficient, “this measure does not prohibit exports,” thus preserving policy flexibility for Japan amid the global supply tightness.

This unilateral action by Japan is being advanced alongside the International Energy Agency (IEA)’s coordinated plan to release 400 million barrels of emergency reserves. The IEA has characterized the current energy crisis triggered by the Iran war as the largest supply disruption in the history of the global oil market. If the Strait of Hormuz remains effectively closed and the conflict is not quickly resolved, there is still a risk of further sharp increases in oil prices.

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