Japan, Germany to release oil from reserves amid energy crisis sparked by West Asia conflict

Japan and Germany on Wednesday said that they will tap into a part of their oil reserves amid fuel supply disruption and rising global oil prices triggered by the conflict in West Asia.

A country’s strategic oil reserve is a stockpile of crude oil controlled by the government to be used in emergencies such as major supply disruptions, conflicts or sudden increase in fuel prices. Tapping into the reserve is rare.

Japanese Prime Minister Takaichi Sanae told reporters that Tokyo will unilaterally release stockpiled oil as early as Monday, state-run news channel NHK World reported.

Germany will also release part of its oil reserve, the country’s Energy Minister Katherina Reiche told reporters.

The measure should help lower global oil prices, AFP quoted Reiche as saying.

Fellow members of the International Energy Agency were also struggling with rising prices, she was quoted as saying.

“The International Energy Agency therefore asked its member states yesterday evening to release oil reserves amounting to 400 million barrels,” Reiche told reporters.

Berlin was releasing its reserves to comply with the international agency’s request, she added.

Additionally, petrol stations in Germany will be able to raise prices only once per day, Reiche said. “But price reductions are allowed at any time,” she added.

The International Energy Agency on Wednesday said that its member countries had unanimously agreed to release 400 million barrels of oil from emergency reserves. This will be the largest such release in the agency’s history, its Executive Director Fatih Birol said.

The quantity is more than double the previous release of 182 million barrels in 2022 after Russia invaded Ukraine.

The Paris-based agency coordinates the release of emergency oil reserves of its members, who are mostly countries part of the Organisation for Economic Co-operation and Development.

Global oil prices crossed the $100 per barrel-mark on Monday. This was the highest level since July 2022.

By Wednesday, the price of benchmark Brent crude had fallen to about $90 per barrel. It was about $72.8 per barrel on February 27, a day before the conflict started.

The escalating tensions have raised fears of disruption to shipments through the Strait of Hormuz. The narrow waterbody connects the Gulf to the Arabian Sea. About 20% of the global petroleum supply passes through the maritime chokepoint.

On Tuesday, the White House said that the US military had not yet escorted any commercial ships through the strait of Hormuz.

White House Press Secretary Karoline Leavitt made the statement hours after US Secretary of Energy Chris Wright claimed in a social media post that the country’s Navy had escorted an oil tanker through the waterway “to ensure oil remains flowing to global markets”. He deleted the post later.

On March 3, US President Donald Trump said that Washington would provide protection for oil tankers passing through the strait.

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