Amid Mideast instability, Japan pushing Asian neighbors to boost oil stockpiles
Amid Mideast instability, Japan pushing Asian neighbors to boost oil stockpiles
Natalie Obiko Pearson
Associated Press
Tokyo
Amid surging instability in the Middle East, Japan is pushing
Asian neighbors to limit the region's vulnerability to a
potential energy crisis by boosting oil stockpiles.
Worried by Asia's booming appetite for oil despite scarce
inventories and its own heavy dependency on imports, resource-
poor Japan has been trying to get others in the region to agree
on a stockpiling system to protect against a fuel crisis.
"In the Asia region, many more countries don't have adequate
stockpiles than those that do, so for the sake of security we are
encouraging them to keep such reserves," said Masaki Ueno, an
official at the Ministry of Economy, Trade and Industry's Agency
for Natural Resources and Energy.
Japan will press the issue at an upcoming meeting of energy
ministers from 10-member Association of Southeast Asian Nations,
China, Japan and South Korea in Manila in June, he said.
Crude oil prices have been driven up by the threat of
terrorism, political instability in the Middle East and
deteriorating security in Iraq. This month, OPEC, which pumps
about a third of the world's oil, also reduced its output target
by 4 percent, threatening to cause prices to rise further.
METI Vice Minister Seiji Murata warned earlier this week that
a continued rise in prices could hurt Japan's fledgling economic
recovery - a view echoed on Wednesday by the International
Monetary Fund's (IMF) chief economist.
Japan, along with the United States, is set to lead worldwide
economic growth to "the best two years in over a decade," but an
unexpected shock like a spike in oil prices could upset that rosy
outlook, Raghuram Rajan said in presenting the latest version of
the IMF's World Economic Outlook.
Japan, with almost no natural resources of its own, is heavily
dependent on oil, which accounts for about 52 percent of its
primary energy consumption. More than 80 percent of the country's
oil comes from the Middle East.
"We are encouraging other countries to come to us for help in
creating and managing stockpiles since we have knowledge in this
area," said Ueno, noting that Japan's own experience in the 1973
oil crisis prompted it to set aside emergency reserves.
Japan and South Korea are the region's only oil importers with
surplus supplies. Japan has about 160-days worth of reserves, but
most other nations have little or no stockpiling system.
Japan is working with China, Thailand and Philippines. Those
countries have plans for their own stockpiles, but progress has
been slow even as energy consumption has soared.
Another official from METI's international division said
China, which last year overtook Japan as the world's No. 2 oil
consumer behind the United States, is of particular concern.
China's ravenous appetite for energy could drive up prices and
drain supplies if an oil shock were to occur, and Japan considers
proper stockpiling measures there crucial to Japan's own energy
security, the official said on condition of anonymity.
Meanwhile, Japan is doing what it can to independently ensure
a secure supply of oil.
In February, Japan signed a US$2 billion deal to develop
Iran's Azadegan oil field, believed to be one of the largest in
the Middle East, with reserves of up to 26 billion barrels. Tokyo
penned the deal despite opposition by Washington, which feared
the money could go to nuclear proliferation.
Japan is also competing with China for Russian oil. Tokyo has
offered to finance exploration and development of East Siberia's
oil reserves and built a pipeline from Siberia to a port on
Russia's Pacific coast.