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Japan auctions 4.8 million barrels of oil reserves

Japan auctions 4.8 million barrels of oil reserves - Photo 1.

An oil plant in Ichihara city, east of Tokyo, Japan – Photo: REUTERS

According to Reuters news agency, this is part of Japan’s efforts to coordinate with the International Energy Agency (IEA) to coordinate supply and lower oil prices.

In early April 2022, IEA member countries agreed to extract 60 million barrels of oil from their reserves, in addition to the 180 million barrels that the US announced at the end of March, to cool down world oil prices. after Russia’s “special military operation” in Ukraine.

Also this month, Japanese Prime Minister Kishida Fumio said his country would release a record 15 million barrels of oil from national reserves, contributing to a second round of oil supplies coordinated by the IEA.

Of which, Japan’s Ministry of Economy, Trade and Industry said 6 million barrels will come from private reserves and 9 million barrels from state reserves.

As of the end of January 2022, Japan has about 470 million barrels of oil reserves, equivalent to enough oil to meet domestic demand for 236 days.

This 470 million barrels includes both state and private reserves from storage tanks held by local refineries and a joint crude stockpile program with producing countries.

In the first step of releasing oil from state reserves, Japan’s Ministry of Economy, Trade and Industry will sell about 1 million barrels of crude oil from Kiire storage, 1.8 million barrels from Shirashima storage, and about 1 million barrels from Shirashima. 2 million barrels from Kamigoto warehouse.

All these reserves are located in southern Japan.

Oil from Kiire and Shirashima will be available to the winning bidders on June 20 or later, while crude from Kamigoto will be available on August 11 or later.

An official from Japan’s Ministry of Economy, Trade and Industry told Reuters the government plans to release the remaining 4.2 million barrels from the national stockpile as soon as possible.

The official also said that Japan will not buy back oil for 6 months under the agreement with IEA members.

Tokyo will also consider whether it should buy back oil to replenish its reserves after six months, based on various factors including the IEA’s stance, the Ukraine crisis and global oil prices.

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