Oil Market Alert: Japan Taps Strategic Reserves Amid Strait of Hormuz Chokehold

Japan will begin releasing part of its oil reserves from March 16 as a response to the Strait of Hormuz blockade and rising global tension. Prime Minister Sanae Takaichi confirmed the move, which aims to cushion Japan’s energy supplies disrupted by the Iran war.

The conflict escalated after US-Israeli strikes on Iran on February 28 triggered a continuing exchange of missiles and drones. Iran and allied forces then blocked the Strait of Hormuz and warned that any vessel entering the passage could be targeted, deepening fears over oil and gas flows.

Strait of Hormuz oil reserves and G7 response

Japan plans to tap both private and state-held stocks to handle the supply shock. According to Reuters, the government intends to release 15 days of private-sector oil reserves and one month of state oil reserves, providing a short-term buffer while trade routes remain uncertain.

The move aligns with talks among Group of Seven members, who are weighing joint use of strategic reserves to ease crude price spikes linked to the Middle East conflict. G7 leaders were due to hold a video meeting chaired by French President Emmanuel Macron to examine the broader economic damage.

Strait of Hormuz oil reserves and G7 coordination

Energy ministers from the G7 signalled support for such steps after crisis talks. "In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves," AFP news agency quoted energy ministers of the G7, of which France currently holds the rotating presidency, as saying in a statement on Wednesday.

The Paris-based International Energy Agency also met on Tuesday to review supply security and discuss possible emergency stock releases. Officials examined how long members could cover demand if the disruption around the Gulf region persists and if further coordinated action becomes necessary.

The Strait of Hormuz, a narrow channel along the Iranian coast, currently blocks about one fifth of global oil shipments. Traffic has not resumed, creating the worst hit to energy flows since the oil shocks of the 1970s and impacting major buyers such as Japan.

The G7, which brings together Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, is expected to keep monitoring the crisis. Japan’s release of reserves shows how major economies are already trying to shield markets while the Iran war and blockade continue.