Japan to Release Oil Reserves as U.S. Encourages Domestic Purchases

• Japan will release 15 days' worth of private-sector oil on Monday and a month's worth from state reserves later this month, reducing national reserves that currently hold 254 days of consumption
• The U.S. is encouraging allies like Japan to purchase more American energy, with Japan currently obtaining only 4% of its oil from the U.S. after stopping Russian purchases following the 2022 Ukraine invasion
• Analysts warn the reserves 'mainly buy time' and cannot fully offset a prolonged disruption in the Strait of Hormuz, which is critical for Japanese oil imports

Summary: Japan Releases Oil Reserves Amid Middle East Supply Disruption

Key Developments

Japan will begin releasing 80 million barrels of crude oil from its strategic reserves starting Monday, March 15, 2026, in response to supply disruptions caused by a U.S.-Israeli conflict with Iran affecting the Strait of Hormuz. This represents approximately 45 days of supply and will reduce national reserves by 17%.

Release Structure

• 15 days' worth from private-sector reserves starting Monday
• 30 days' worth from state reserves beginning late March
• An additional 12 million barrels potentially available from joint stockpiles held by Saudi Arabia, UAE, and Kuwait
• Part of a coordinated 400 million barrel global release through the International Energy Agency

Strategic Context

Japan remains heavily dependent on Middle Eastern oil for approximately 90% of its supply. The nation currently stockpiles 254 days of consumption, a system established in 1978 following the Arab oil embargo. This marks Japan's first reserve release since 2022 during Russia's Ukraine invasion.

Japan imports only 4% of its oil from the U.S., having stopped Russian purchases after 2022. Tokyo is now seeking alternative suppliers from the U.S., Central Asia, South America, and Gulf nations with routes bypassing Hormuz.

Market Implications

Analysts warn that while reserves can stabilize short-term supplies and prices, they "mainly buy time" and cannot fully offset prolonged Strait of Hormuz disruptions. The U.S. is encouraging allies to increase American energy purchases, positioning itself as a secure Indo-Pacific energy supplier amid heightened geopolitical risks.