Japan Weighing Release Of Oil Reserves To Curb Prices

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The government is discussing the release of state oil reserves as part of an effort to tackle surging crude oil prices, government sources said Friday.

In response to the spike in crude oil prices, the United States has asked multiple countries including Japan to consider tapping oil stockpiles. The government is looking at meeting the request to work in coordination with other countries, according to the sources.

Under current regulations, state oil reserves are not intended for use to address price surges. As there are more than enough reserves, however, a plan under consideration calls for releasing a surplus after lowering the reserve target, the sources said.

It would be Japan’s first release of state oil reserves since the country complied with a request from the International Energy Agency in June 2011 due to the deteriorated situation in Libya.

The government’s new economic stimulus package adopted on Friday includes measures to curb soaring gasoline prices. The government plans to consider releasing state oil reserves, along with a subsidy system for oil distributors, according to the sources.

In Japan, institutions including Japan Oil, Gas and Metals National Corp. and oil distributors stockpile crude oil and petroleum products in preparation for a supply cutoff caused by natural disasters or political instability.

At the end of September, Japan had reserves that can cover 242 days, in excess of the amount required for each IEA member nation.

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