News On Japan

Japan Holds Eight Months of Oil Reserves but Faces Material Shortages

TOKYO - A month has passed since the United States and Israel launched attacks on Iran, and while Japan holds oil reserves equivalent to roughly eight months of domestic consumption, concerns are growing that rising crude prices and supply disruptions could begin to affect everything from plastic bottles to medical IV tubes.

Crude oil futures have surged sharply, climbing from 67 dollars per barrel on February 27th before the conflict to 98 dollars on March 20th, briefly falling to 84 dollars around March 23rd after an announcement delaying an attack on Iranian power facilities, before rising again to 103 dollars on March 30th amid renewed uncertainty.

The continued de facto closure of the Strait of Hormuz, a route that accounts for roughly 20 percent of the world’s oil supply, has heightened fears of further disruption to the global economy, with Asia particularly exposed due to its heavy dependence on Middle Eastern crude.

According to Takafumi Yanagisawa of the Institute of Energy Economics, Japan, approximately 20 million barrels of oil pass through the Hormuz route each day, while alternative supply routes such as Saudi Arabia’s pipeline to the port of Yanbu can handle about 5 million barrels daily.

However, risks remain elevated after Yemen’s Iran-aligned Houthi forces signaled their intention to target shipping routes, a development that Nomura Research Institute executive economist Nobuhide Kiuchi said could push prices higher by an additional 5 to 10 dollars per barrel.

As uncertainty grows, governments around the world have begun urging energy conservation measures.

Prime Minister Sanae Takaichi wrote on social media on March 29th that Japan’s needs are currently being met through the release of strategic reserves, calling on the public to remain calm.

Estimates suggest oil stockpiles vary widely across Asia, with Japan holding about eight months’ supply, South Korea about seven months, Thailand three months, the Philippines around one and a half months, and Sri Lanka just 25 days.

In response, countries have moved quickly to introduce conservation measures.

South Korea has implemented a vehicle restriction system based on license plate numbers, limiting when approximately 1.5 million government and public-sector vehicles can operate.

Thailand has called for reduced use of air conditioning in government offices and encouraged limiting elevator use.

The Philippines is recommending a four-day workweek for private companies, while Sri Lanka has designated Wednesdays as non-operational days for most public services except essential sectors such as hospitals and immigration.

Despite these measures, the impact of oil consumption can be difficult for individuals to grasp.

Yuki Kinoshita, a parenting influencer, noted that while water conservation measures are easy to visualize, reducing oil usage is less straightforward, particularly for those living in rural areas where dependence on cars is high.

Even when oil is mentioned, its use in daily life is not always visible, and there is often a delay before rising costs are reflected in consumer prices, making the situation harder for the public to fully perceive.

In Japan, discussions are beginning over how to respond without stalling the economy.

At a joint ruling party meeting on March 24th, petroleum industry executives cited the International Energy Agency’s ten-point plan for reducing fuel demand as a potential framework.

These measures include promoting remote work, lowering highway speed limits by 10 kilometers per hour, encouraging public transport use, introducing alternating vehicle restrictions in urban areas, expanding car sharing, and avoiding air travel when alternative transport options exist.

While the government remains cautious about calling for conservation too early out of concern for economic activity, experts warn that delaying action may not be sustainable.

Go Matsuo, head of the Institute of Energy Economics and Society, pointed out that countries such as South Korea, Thailand, the Philippines, and Sri Lanka face more immediate risks due to limited refining capacity or reliance on imports.

Japan, by contrast, is not in immediate danger, but Matsuo stressed that the government will need to carefully consider when to shift toward conservation measures.

Ultimately, the decision will come down to political timing, as questions grow over how long the country can continue operating as usual, not only in fuel consumption but also in the use of petroleum-based products such as plastics, which could soon face supply constraints if the situation persists.

Source: TBS

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