Japan might release emergency oil supplies
Japan is in talks with the International Energy Agency on measures to help ease petroleum supplies in the US Gulf Coast area, including a possible release of some of Japan’s strategic oil reserves, a trade ministry official said today.
“We’ve received a call from the IEA and started talks with them on measures for the oil supply disruption in the US,” a senior official at the Ministry of Economy, Trade and Industry said.
On Wednesday, the IEA began consultations with its members on the release of some of their oil products inventories after Hurricane Katrina ravaged the Gulf Coast and shut down around 90% of crude production capacity.
The region is responsible for around 30% of US crude production and quarter of its gas.
“We are discussing a broad range of countermeasures that Japan and other IEA members could take,” the METI official said in a briefing. “Releasing our oil reserves is one possibility.”
In Asia, Japan and South Korea are members of the International Energy Agency, a Paris-based oil market watchdog under the Organisation for Economic Co-operation and Development, which recommends that its members hold oil reserves equal to at least 90 days of net imports or domestic requirements.
As of June 30, the Japanese government held 50.99 million kiloliters, or 320.7 million barrels, of state-owned crude oil stocks.
Under the oil stockpiling law, Japanese refiners, wholesalers and importers are required to maintain crude and refined product reserves equivalent to their oil imports or production volumes for 70 days.
Private oil companies held 20.6 million kiloliters, or 129.5 million barrels, of refined petroleum products, and 22.41 million kiloliters, or 140.9 million barrels, of crude oil, in stocks as of June 30.
Hurricane Katrina’s destruction to oil facilities has sent oil prices surging. The front-month October light, sweet crude contract on the New York Mercantile Exchange fell 17 cents to $69.30 a barrel in Singapore today.
