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The amount is comparable to the daily oil production of Venezuela – 620,000 barrels, according to Refinitiv data from November 2021.
Japan’s oil reserves as of end-October 2021 stood at 490.4 million barrels – sufficient to meet domestic demand for 244 days, according to Japan’s Agency of Natural Resources and Energy.
Sixty percent of that figure is accounted for by state reserves – made up of 285.9 million barrels of oil and 9 million barrels of oil products. The remaining 40 % is made up of private reserves (75.9 million and 108.8 million barrels respectively) and by reserves of Saudi Arabia and the United Arab Emirates located on Japanese territory (10.8 million barrels of oil).
The Japanese government proceeded with the decision to release part of its strategic reserves following U.S. President Joe Biden’s announcement on 23rd November about Washington’s intention to release 50 million barrels of its reserves. Total reserves as of end-September stood at 617.8 million barrels, according to figures from the Energy Information Administration (EIA) of the U.S. Department of Energy.
Alongside the United States and Japan, other countries announcing their intention to release part of their reserves include India, South Korea and Great Britain. A similar move was announced by China in September.
The sale of parts of strategic reserves is aimed at cooling oil prices which, at the end of October, hit $86 a barrel for the first time in three years. The market was subject to a correction in November linked to the rapid spread of the Omicron variant of Covid and the risk of a surplus associated with increased production by OPEC+ countries.
As a result, at the beginning of December, Brent futures on the ICE exchange dipped to $69 a barrel. But in recent weeks, the market was hit by a “rebound” – at the close of trade on 27th December, Brent reached $79 a barrel. As was the case at the close of 2020, as commodities markets were only beginning to recover, prices were bolstered by a general atmosphere of a pre-New Year rally.