How Long Can Japan's Oil Stockpile Last?

Japan is entering the sixth month of the most severe crude oil supply disruption in its post-war history, and its national petroleum stockpile has become the main buffer keeping refineries running. The Strait of Hormuz has been effectively closed to normal commercial tanker traffic since late February 2026, a disruption that falls heavily on Japan, which sources more than 90 percent of its crude oil from the Middle East and normally routes about 70 percent of those cargoes through the strait.

The Ministry of Economy, Trade and Industry acted in stages. On March 16 it cut the private stockpiling obligation from 70 days to 55 days, freeing 15 days of commercial inventory for immediate use. On March 24 it authorised a release of national crude reserves equal to roughly one month of supply, about 8.5 million kilolitres, and JOGMEC started physical deliveries on March 26 from eleven sites including the Kikuma, Shibushi, Shirashima, Kamigoto and Tomakomai-Tobu bases. Eneos, Idemitsu Kosan, Cosmo Oil and Taiyo Oil received the barrels, with sales valued at around 540 billion yen. The Japanese drawdown, about 80 million barrels of crude and products, formed part of an International Energy Agency collective action agreed on March 11 covering roughly 400 million barrels.

A second national release of about 20 days of supply began on May 1 from the Shibushi base in Kagoshima and was extended to the other stockpiling sites. Reserve levels fell accordingly. Japan held the equivalent of 248 days of consumption at the end of January 2026, or 72.89 million kilolitres. By April 21 preliminary ministry data showed 214 days, made up of 131 days of national reserves, 81 days of private-sector reserves and 3 days of stocks held jointly with producing countries. That total was 29 days lower than at the end of February, the fastest drawdown Japan has ever recorded.

The pace of depletion has since slowed because alternative procurement worked better than expected. Refiners rerouted purchases to the United States, Azerbaijan, South Sudan and Russian Sakhalin grades, which were never sanctioned by Tokyo. The first American cargo bought and loaded after the war began, roughly 910,000 barrels of WTI, reached the Keiyo Sea Berth off Chiba on April 26 for Cosmo Oil. Shipments from the United States between January and May reached about 18.9 million barrels, close to three times the volume sent over the same period in 2023. June procurement recovered to around 80 percent of the year-earlier level and July procurement was projected at roughly 100 percent.

Because of that recovery, the ministry decided against a third national release in May, June and July. The 15-day reduction of the private stockpiling obligation has been rolled over month by month instead. Officials stated in June that even under a conservative scenario in which imports only return to 75 percent of normal volumes from August, stockpiles would keep national supply secure until the end of March 2028.

The security of that outlook now depends on the war. A ceasefire framework agreed in April collapsed in early July after Iranian attacks on three tankers transiting Hormuz. Washington launched further rounds of airstrikes, reimposed sanctions on Iranian oil exports and reinstated a naval blockade of Iranian ports in mid-July. Fresh American strikes on dozens of Iranian military targets were reported at the end of the month. Tanker traffic through the strait remains far below pre-war levels, although it has improved from the lowest point.

Prices reflect the uncertainty. Brent traded near 89 dollars a barrel on July 31 after a gain of about 24 percent over the month, having briefly topped 110 dollars in late March and swung above 100 dollars in April. Every increase of 10 dollars a barrel is estimated to add around 0.3 percentage points to Japanese inflation, and analysts have warned that sustained prices above 120 dollars could push the economy into stagflation.

The shortage is no longer confined to fuel. Japan imports about 40 percent of its naphtha, mostly from the Middle East, and much of the domestically produced volume is refined from Gulf crude. Paint and solvent shortages have already disrupted housing and construction projects. On July 7 industry minister Ryosei Akazawa said the government would study reviving naphtha stockpiling, an obligation scrapped in 1993 at the request of petrochemical producers. Because naphtha evaporates easily, the ministry is examining storage in pellet form or an increase in crude stockpiles that could be allocated to naphtha production.

Support measures have widened alongside the physical response. A subsidy programme reintroduced on March 19 aims to hold regular gasoline below 170 yen a litre. From July 1, Credit Guarantee Corporations opened the Safety Net Guarantee No.5 scheme to 583 designated industries, roughly half of the national total, giving affected small firms access to emergency credit guarantees of up to 280 million yen.

The structural problem behind the crisis has not changed. Japanese refineries were configured over decades for medium-grade Gulf crude, and switching them to lighter American or heavier Venezuelan grades would require investment measured in tens of billions of yen per site. Blending is possible but limited. Oil also underpins plastics, packaging and industrial feedstocks that have no easy substitute. Diversification through electrification carries its own exposure, since China controls the bulk of global capacity for solar equipment, batteries and electric vehicles.

Japan has bought time rather than solved the problem. Reserves have absorbed the shock so far, and the ministry says national volumes are secured, but distribution bottlenecks are still producing localised shortages, and any renewed closure of Hormuz would restart the drawdown from a much lower base than in March.