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Japan works on liberation of oil reserves after US request

U.S.A.Japan works on liberation of oil reserves after US...

FILE PHOTO: A branch of Cosmo Oil’s Cosmo Energy Holdings gas station in Tokyo, Japan, December 17, 2015. The photo was taken on December 17, 2015. Reuters / Yuya Shino / File photo

By Ritsuko Shimizu, Yoshifumi Takemoto and Aaron Sheldrick

TOKYO, Nov 22 (Reuters) – Japanese officials are working with other major economies to circumvent restrictions on the release of domestic crude oil reserves to push prices down, four government sources with knowledge of prices told Reuters. told.

Although Prime Minister Fumio Kishida signaled his readiness over the weekend following Washington’s request, the world‘s fourth-largest oil buyer has restrictions on operations with its reserves – which are made up of private and public stock – which usually only Can be used in times of shortage. ,

One of the sources said that the government is studying the possibility of releasing that part of the state reserves which is outside the minimum amount required as a legal remedy.

A second source said officials are also studying private stocks that are part of the national reserve, which some advisers say could be issued without restrictions.

After a request from the United States, “we have no choice but to come up with something”, a third source told Reuters. All sources declined to be identified as the plan has not been made public.

Chief Cabinet Secretary Hirokazu Matsuno said on Monday that nothing had been decided, while Kishida said on Saturday that the government was considering what it could do legally.

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Consulting operators said that they have not received any information in this regard.

According to state agency Jogamek, private Japanese companies, including refineries, own about 175 million barrels of crude and petroleum products as part of the Strategic Petroleum Reserve (SPR), enough for about 90 days of consumption. The charge of release after the decision of the authorities.

Oil company reserves have been used during the 1991 Gulf War and after the disasters of the 2011 earthquake and tsunami. The state part of the SPR has never been used.

Brent crude was down slightly on Monday after crashing in prices on Friday, largely due to the impending shutdown in Europe and not oil release plans. [O/R]

The Biden administration made a proposal unusual to other major economies to consider releasing oil from their strategic reserves after members of the Organization of the Petroleum Exporting Countries and their allies repeatedly rejected their requests to ramp up their production. Huh.

Citing government sources, the Yomiuri newspaper said Japan and the United States would coordinate the announcement of the release of oil reserves earlier this week.

Higher prices are beginning to create unwanted inflation and undermine the recovery from the COVID-19 pandemic.

(Reporting by Yoshifumi Takemoto, Ritsuko Shimizu and Aaron Sheldrick; Writing by Kantaro Komiya and additional information; Editing by Chang-Ran Kim and Jacqueline Wong, translated by Jose Munoz into Gdansk writing)

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