Japan and Australia said on Thursday they were prepared to tap their oil reserves, together with other International Energy Agency (IEA) member countries, if global supplies were hit by hostilities in Ukraine.
Japan would support a coordinated oil release from its emergency stockpile if requested by the IEA, an official with the industry ministry said.
At the same time, Bank of Japan governor Haruhiko Kuroda told his country’s parliament the central bank would closely monitor how escalating tensions in Ukraine could affect oil prices, given Japan’s heavy reliance on energy imports.
Australia’s Energy Minister Angus Taylor said Canberra was working closely with the US and the IEA to monitor oil and gas markets ahead of any move to tap the small stockpile that Australia holds in the US Strategic Petroleum Reserve.
Oil prices jumped to seven-year highs this week on worries that oil and gas supplies could be disrupted if Russia launches an all-out invasion of Ukraine at a time when global oil stockpiles are tight.
Russian President Vladimir Putin on Thursday announced the beginning of an offensive in Russian-occupied eastern Ukraine and called on Ukrainian government forces to surrender.
The IEA said earlier this week that member countries stood ready to act together to ensure global oil markets are adequately supplied.
Total oil stocks in IEA member countries stood at close to 4.16 billion barrels as of end-December, including 1.5 billion barrels held by governments in emergency reserves, the IEA said on February 22.
As of end-December, Japan held 480 million barrels in its reserves, while Australia held 1.7 million barrels in the US SPR.
Oil traders in Asia said preparation for a coordinated oil release was not having much impact on prices on Thursday as a previous release late last year had only involved a small volume.
“The market doesn’t really seem to be reacting to an SPR release. I think it’s because the previous round of releases had limited impact,” a Singapore-based oil trader said.
- Reuters with additional editing by Jim Pollard
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