Japan will release oil reserves in order to lower prices

Tokyo, Nov 24, : Fumio Kishida, Japans Prime Minister, stated Wednesday that the country would release oil.This would be the first time the resource-poor country has attempted to reduce prices by tapping its reserves.

This was in coordination with other major energy-consuming nations.Other countries are expected to follow suit.

Oil prices rose in New York and Tokyo overnight, but there were doubts about the effectiveness of this move, as the oil released is only worth a few days of consumption.Japans decision to build reserves in the past was made to solve supply issues after natural disasters or political turmoil.

The country has so far implemented five releases, including those following the Gulf War in early 1990s, the March 2011 earthquake, tsunami, and subsequent Gulf War.Japan is a member of International Energy Agency and must maintain oil reserves equal to 90 days net imports in the preceding year.Private emergency reserves should not exceed 70 days of Japans oil consumption in the preceding year.

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