Japan to Continue Oil Reserve Release Until 5 November

Text of report in English by Japanese news agency Kyodo

Tokyo, 7 October: Japan will extend its measures to free oil reserves held by the private sector for another 30 days through 5 November in a concerted action by the International Energy Agency to help stabilize the global oil market following hurricane damage to US refineries, the industry minister said Friday [7 October].

Economy, Trade and Industry Minister Shoichi Nakagawa said at a press conference that Japan will maintain its current policy of lowering its normal 70-day minimum stockpile levels among 66 private sector oil companies by three days to 67 in a bid to increase supplies to the market.

“Crude oil prices are still flying high, and the IEA’s entire oil release goal has not been achieved yet. We thought raising the minimum reserve levels for Japanese firms could affect the global oil market,” the minister said.

The Japanese oil companies are thought to have completed the release of a combined 7.32 million barrels required under the joint action by IEA member countries during the past 30 days, an official of the Economy, Trade and Industry Ministry said.

The latest inventory data of the oil firms will be clarified around next Wednesday as the initial 30 day release expired Thursday, the METI official said. “A soft landing is necessary for the reserve release policy” so as not to adversely affect the global market, he said.

The IEA announced on 2 September that its 26 members would release a total of 2 million barrels per day from their strategic oil reserves for an initial period of 30 days after Hurricane Katrina severely damaged oil production facilities along the US Gulf Coast.

Japan was allocated with 12.2 per cent of the IEA’s total 60 million barrel release. The IEA action has not been fully completed, and the Paris-based organization is expected to discuss whether additional measures are needed during its governing board meeting on 20 October, the official said.

The IEA and the United States have been closely contacting each other over damaged oil supply capacities in the country, but they are still assessing the negative impact of Hurricane Rita, which hit the US Gulf Coast after Katrina, he said.

Nakagawa pointed out the need to evaluate damages not only in the United States but in many developing countries that have been suffering from oil price hikes.