Oil producers and consumers need to strengthen their cooperation, and Asian countries specifically need to boost oil stockpiles and infrastructure, Japan’s trade minister has said.
Speaking at the virtual International Energy Forum, Ryosei Akazawa said that Japan will seek to take on the role of a “bridge” between Middle Eastern oil producers and oil importers in Asia to stabilize global energy supply as energy security becomes a top priority, overtaking efforts to shift away from oil and gas.
Security of energy supply has in fact become so important that even the Asia Zero Emission Community, headed by Japan, has redirected its focus from emissions to oil supply. Earlier this month, the organization agreed to build a more substantial oil inventory in Asia and coordinate releases when the need arises.
“Expectations for Japan are extremely high because of its extensive experience with stockpiling,” a state minister for economy, trade, and industry said last week.
Japan moved in the spring to release crude oil from its strategic reserves as part of an IEA-coordinated global effort to release 400 million barrels of crude and oil products. The country holds the third-largest strategic oil stockpile in the world, after China and the United States. In April, the U.S. Energy Information Administration estimated China’s inventory at 1.397 billion barrels, followed by the U.S. reserve, at 413 million barrels, with Japan holding 263 million barrels of crude in strategic inventory.
Since the war in the Middle East began, resource-poor Japan has scrambled to secure crude oil supply from alternative sources as its dependence on crude from the Middle East passing through the Strait of Hormuz was more than 90% of all crude imports.
By Charles Kennedy for Oilprice.com
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