Japan considers releasing oil reserves to curb prices

TOKYO: Japan's government is considering releasing oil from its reserves in response to rising crude oil prices, Kyodo news agency reported on Saturday, without citing sources.

It would be the first time for Japan to release oil reserves for the sake of lowering prices, although the country in the past has tapped such reserves when it faced natural disasters and geopolitical risks overseas, Kyodo said.

Government officials were not immediately available for comment.

The government of US President Joe Biden, who faces falling approval ratings and higher gasoline prices, has pressed some of the world's biggest economies to consider releasing oil from their strategic reserves to quell high energy prices.

Oil drops below $80 on European COVID concerns

The requests include asking China for the first time to consider releasing stocks of crude.

Japan reacted positively to the initial US outreach on a possible coordinated reserve release and was considering such a step, a person familiar with the matter told Reuters previously.

Chief Cabinet Secretary Chief Cabinet Secretary Hirokazu Matsuno declined to comment on Thursday about the US requests, first reported by Reuters.

"We will continue to closely watch how rising crude oil prices will affect global energy markets and the Japanese economy," he told reporters. "While urging oil-producing nations to ramp up oil output, we will strive to stabilise energy markets by coordinating with major consumer nations and international organisations," such as the International Energy Agency.

Resource-poor Japan gets the vast majority of its oil from the Middle East. Recent surging oil prices and a weakening yen are driving up the cost of imports, dealing a double blow to a trade-dependent nation.

The government of Prime Minister Fumio Kishida on Friday unveiled a record $490 billion stimulus plan including measures to counter higher oil prices. It plans to subsidise oil refiners in the hope of capping wholesale gasoline and fuel prices to ease the pain to households and firms from rising oil costs.

"What's important is to urge oil-producing countries to ramp up oil production," Kishida said last month after discussions with cabinet ministers. "We will arrange concrete measures after confirming what industry sectors are being affected."