Japan may start stockpiling U.S. oil domestically, Prime Minister Sanae Takaichi said during her visit to the United States, as it looks to diversify procurement and strengthen energy security.
Before Japan tapped its strategic oil stocks this week in a record release to offset fallout from Middle East supply disruptions and rising energy prices, it was holding around 470 million barrels or 254 days of consumption in its tanks.
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It was not immediately clear if the U.S. oil would become part of Japan’s strategic stocks or be available for use by the U.S. when needed.
Takaichi, speaking to reporters in the U.S., said both countries have also agreed to work together to expand U.S. energy production. Japan gets around 4% of its oil needs and some 6% of its liquefied natural gas from the U.S. and has been increasing its energy investments there.
“I also conveyed to President Donald Trump my intention to realize a joint project in which crude oil procured from the United States would be stockpiled in Japan,” Takaichi said.
“This is based on the understanding that diversifying procurement sources will contribute to a stable supply of energy for Japan and for Asia as a whole.”
Takaichi provided no details on the plan for stockpiling U.S. oil in Japan. Japan holds joint oil stockpiles with Saudi Arabia, the United Arab Emirates and Kuwait – a total of about 13 million barrels – as part of its domestic strategic reserves and has a priority right to the use of those stocks.
Japan is dependent on the Middle East for more than 90% of its oil supplies, and its industries – from steel plants and petrochemical companies to public bathhouses – have started to feel the effects of supply shortages and price increases as a result of the Strait of Hormuz closure.
Japan’s contribution to the record oil release coordinated by the International Energy Agency totals nearly 80 million barrels, consisting mainly of crude oil, according to figures released by the IEA on Thursday. Japan’s portion of the release was second only to the U.S. contribution of 172 million barrels.
Japan’s stockpiles held jointly with Saudi Arabia, the UAE and Kuwait were not used in the release coordinated by the IEA.
During Takaichi’s visit, Japan and the U.S. announced expanded cooperation, including Japanese investment of up to $73 billion in U.S. energy projects and an action plan to develop alternatives to China for critical minerals and rare earths.
(Reporting by Tamiyuki Kihara; Writing by Katya Golubkova; Editing by Tom Hogue)
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