Japan is the first to be unable to bear the pressure of releasing strategic petroleum reserves alone. | white oil 8042-47-5 Price Impact

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Japan is the first to be unable to bear the pressure of releasing strategic petroleum reserves alone.

Published on 2026-03-14

On March 11, Japanese Prime Minister Takaichi Sanae announced a decision that broke a 48-year precedent: Japan will unilaterally release its oil reserves as early as March 16, including private reserves equivalent to 15 days of consumption and national reserves covering one month’s supply.

This move came nearly 24 hours before the International Energy Agency announced the largest-ever release of 400 million barrels of oil reserves. It also marks the first time Japan has independently released its national oil reserves since the establishment of its oil reserve system.

Japan is the first to buckle under pressure.

If you fly into Kitakyushu and look down through the aircraft window, you’ll see a strange cluster of white dots floating on the sea. That’s the Shirajima National Oil Reserve Base. On this massive artificial island, rows of white oil storage tanks are densely arranged, resembling cans waiting to be opened, silently floating on the Sea of Japan.

These “energy cans” represent Japan’s hard-earned reserves accumulated over half a century.

In 1973, the oil embargo by Middle Eastern oil-producing countries plunged Japan into panic. Oil prices soared, toilet paper was sold out, and inflation skyrocketed. That nightmare spurred Japan to establish its oil reserve system.

In 1975, Japan’s National Diet passed the Petroleum Reserve Act, requiring private companies to hold reserves equivalent to 90 days of supply. However, given Japan’s near-total reliance on imported crude oil, the government began establishing national crude oil reserves in 1978. Over the following decades, these white storage tanks were opened only a handful of times.

The most recent “opening of the cans” occurred in 2022, when Japan responded to the International Energy Agency’s call and released oil reserves in line with global efforts, influenced by the Russia-Ukraine conflict. In every previous instance, Japan had “followed the lead” and never independently “opened the cans” on its own.

But that precedent was broken yesterday.

For Japan, accustomed to “following the lead,” this move may be more unsettling than the rise in oil prices itself. When people start dipping into their emergency food reserves, it means the usual routes are no longer viable.

When announcing the decision to release oil reserves, Takaichi Sanae stated, “It is expected that our country’s crude oil imports will significantly decrease from late this month.”

As is well known, Japan is a resource-poor country, with domestic production accounting for only 0.2% of its total oil supply. According to the Petroleum Association of Japan, Japan relies almost entirely on oil imports, with nearly 96% coming from the Middle East. For Japan, the route that has become impassable is the Strait of Hormuz.

With external oil unable to flow in, Japan has no choice but to tap into its reserves.

According to data from Japan’s Ministry of Economy, Trade and Industry, as of the end of 2025, Japan’s total oil reserves amount to approximately 470 million barrels, equivalent to 254 days of consumption.

On the surface, Japan appears to have ample reserves. In reality, however, Japan is not in a comfortable position.

The day after the announcement, Japan’s Liberal Democratic Party held an emergency joint meeting, urging the government to ensure stable energy supplies and address disruptions in maritime transportation. They called on the government to seek alternative oil supply sources and routes that bypass the Strait of Hormuz.

This sense of urgency is not unfounded.

According to statistics from Japan’s Ministry of Economy, Trade and Industry, as of March 9, the national average gasoline price in Japan was 161.8 yen per liter, marking four consecutive weeks of increases and surpassing the 160-yen threshold for the first time in three months. A Japanese oil information center predicts that prices may rise by another 20 yen next week.

The Japanese government has already planned to reintroduce gasoline subsidies in an attempt to keep prices around 170 yen per liter. However, the upward trend in international oil prices is far from something subsidies can fully offset.

Despite the International Energy Agency’s announcement of oil reserve releases on the 12th, international oil prices continued to rise that day, with Brent crude reaching a high of $101.59 per barrel, surging 10.45% intraday. WTI crude also surged nearly 10%, reaching a peak of $95.97 per barrel.

The market is more honest than the government—releasing oil reserves has not alleviated anxiety.

According to Reuters analysis, this historic release of reserves is essentially a “stopgap measure.” It depletes the last buffer of various countries. Once the conflict persists or escalates further, the buffering capacity of consuming nations will be significantly reduced.

In other words, reserves are stock, while imports are flow. If the flow is cut off, no matter how large the stock, it will eventually run out.

Tomoyuki Akutagawa, chief researcher at Mitsubishi UFJ Research and Consulting, warned that a prolonged blockade of the Strait of Hormuz would deal a “fatal blow” to Japan’s economy. Meanwhile, Takahide Kiuchi, an economist at Nomura Research Institute, calculated that in the worst-case scenario, Japan’s real GDP would decline by 0.65% within a year, with prices rising by 1.14%. The risk of stagflation—a combination of economic recession and inflation—is looming.

And this is only the direct impact. Coupled with the pressure of a weakening yen, Japan’s economy is facing a massive storm.

If the Strait of Hormuz remains blocked for an extended period, how long can Japan’s 254-day reserves last?

No one knows the answer.

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