Japan Sets Up Panel on Oil Product Stockpiles

Tokyo, July 24 (Jiji Press)–Japan’s trade ministry said Friday that it has set up a working group to examine measures for stockpiling oil products, including naphtha, and diversifying crude oil procurement sources. The working group will discuss mid- and long-term strategies in response to concerns over potential supply shortages of petroleum products triggered by the effective closure of the Strait of Hormuz, a key waterway for Middle East crude oil, amid regional tensions. Comprising university professors and lawyers, the group was established within the Advisory Committee for Natural Resources and Energy, one of the ministry’s advisory bodies. Its first meeting was held the same day behind closed doors. Naphtha was subject to stockpiling obligations in Japan until 1993, when the government abolished the requirement due to heavy costs. Japanese trade minister Ryosei Akazawa said this spring that the government would consider resuming the country’s stockpiling of naphtha, after a string of complaints about shortages of thinners and paints made from naphtha. Regarding Japan’s crude oil procurement, concerns had been raised over the country’s dependence on the supply route through the Strait of Hormuz, which accounted for as much as 93 pct of its crude oil imports. In addition to measures to diversify crude oil procurement sources, the group will consider refinery upgrades to enable the processing of a wider range of crude oil grades. Also on Friday, the government held an expert meeting on measures to ensure stable supplies of goods in light of the situation in the Middle East. During the meeting, it was reported that crude oil imports in August are expected to be roughly on par with the monthly average recorded a year earlier, as in July. END [Copyright The Jiji Press, Ltd.]