Japan begins releasing oil reserves in largest IEA stockpile draw

Monday 16 March 2026 - 09:20

By: Dakir Madiha

Japan begins releasing oil reserves in largest IEA stockpile draw

Japan began releasing strategic oil reserves on Monday as part of what the International Energy Agency described as the largest coordinated drawdown of emergency stockpiles in its more than 50 year history. The move forms part of a joint effort by 32 countries to counter the supply shock triggered by the war involving Iran and the effective closure of the Strait of Hormuz.

The IEA confirmed that emergency oil supplies would first be directed toward Asian markets before similar releases in Europe and the Americas later in March. Executive director Fatih Birol said the initiative would inject unprecedented volumes of oil into the market starting March 16, but stressed that reopening the Strait of Hormuz remains critical for restoring stable energy flows.

Japan, which relies on the Middle East for about 95 percent of its oil imports, moved quickly to implement the coordinated response. The government issued a notice in its official gazette lowering the mandatory level of oil reserves, forcing stockpile managers to begin releasing supply into the market.

Government spokesman Minoru Kihara said the initial phase would release the equivalent of 15 days of oil reserves held by the private sector. This will be followed by an additional release equivalent to one month of government controlled strategic stockpiles.

South Korea also announced a major contribution to the coordinated effort, pledging to release 22.46 million barrels from its reserves. The draw represents the country’s largest ever release and exceeds the volumes it deployed during the Gulf War in 1991.

The broader initiative involves all 32 IEA member countries, which unanimously approved the release of 400 million barrels on March 11. The figure is more than double the 182 million barrels released after Russia’s invasion of Ukraine in 2022.

Of the total, 271.7 million barrels will come from government controlled strategic reserves, while 116.6 million barrels will be drawn from mandatory industry stockpiles and 23.6 million barrels from other sources. The supply consists of roughly 72 percent crude oil and 28 percent refined petroleum products.

The United States is contributing 172 million barrels from its Strategic Petroleum Reserve. Deliveries are expected to occur over roughly 120 days. Energy Secretary Chris Wright said the first phase will involve a swap arrangement, effectively a loan of 86 million barrels that companies must later repay with interest.

President Donald Trump said the government intends to replenish the reserve once market conditions stabilize.

Despite the scale of the intervention, analysts remain skeptical that the release will significantly ease pressure on global oil prices. The Strait of Hormuz normally carries about one fifth of the world’s daily oil supply but has been effectively closed since early March after Iran targeted shipping in response to United States and Israeli strikes.

Analysts at Bernstein said the reserve release would likely have minimal impact on prices because the daily drawdown represents only a fraction of the supply lost due to the disruption.

Neil Quilliam, a research fellow at Chatham House, described the move as a temporary measure rather than a long term solution. He warned that once the reserves are depleted there may be few viable alternatives if the crisis continues.

Jim Burkhard, vice president at S&P Global Energy, said the oil market remains severely unbalanced and will likely stay under pressure until the Strait of Hormuz reopens and production and transport operations return to normal levels.