The Japan Petroleum Association has urged the government to initiate a second round of strategic reserve releases, matching the scale of the first batch. Concurrently, it is actively seeking alternative supply sources beyond the Middle East to address energy security pressures stemming from the ongoing tensions in the Strait of Hormuz. The President of the Japan Petroleum Association stated on Monday that he hopes the Japanese government will release a second batch of strategic reserves on the same scale as the first release. Previously, on March 13, the Japanese government announced the initiation of a release of approximately 80 million barrels from national and private strategic petroleum reserves. Regarding supply diversification, the association's president indicated that North America is one potential source to replace Middle Eastern crude oil supplies and suggested that Japan should invest in expanding crude oil production capacity in Alaska. Ecuador, Colombia, and Mexico were also listed as potential options. Simultaneously, the association clearly stated that, apart from the Sakhalin-2 project, Japan has no plans to purchase Russian crude oil.

The first reserve release has been initiated, with the pricing mechanism drawing attention. The Japanese government announced on March 13 that it would begin releasing approximately 80 million barrels from national and private strategic petroleum reserves as early as the following week. This crude oil will be sold with reference to the Official Selling Price (OSP) set by Middle Eastern oil producers before the conflict erupted. OSP is typically set monthly by Middle Eastern oil producers for long-term contracts. The specific price varies depending on the crude grade and is determined by adjusting the differential to a benchmark crude price, combined with an assessment of market supply and demand conditions for that month. Regarding pricing implementation, Japan's Minister of Economy, Trade and Industry, Ryo Masu Akazawa, has explicitly warned domestic refiners against profiteering by purchasing state-reserve crude oil at low prices. The minister stated that the government would continue communicating with the industry to ensure the release proceeds in a "manner deemed reasonable and convincing by the public," aiming to pass the cost benefits on to end consumers.

Diversification Strategy: North America and Latin America Emerge as Alternatives Since the full-scale escalation of the Middle East conflict, international oil prices have surged significantly. On February 27, just before the full-scale escalation, the global benchmark Brent crude closed at $72.48 per barrel; it has since risen to $108 per barrel. The market widely anticipates that if the Strait of Hormuz remains effectively closed with no signs of easing tensions, oil prices will continue to face upward pressure. The president of the Japan Petroleum Association admitted that the closure of the Strait of Hormuz was never anticipated, as it would trigger a global energy crisis. This statement highlights the unexpected severity of the situation's impact on the global energy market and further underscores the urgency for Japan to accelerate its supply diversification efforts. Faced with the risk of supply disruptions from the Middle East, the Japan Petroleum Association is actively seeking alternative sources. The association's president stated that North America is a potential alternative source for Middle Eastern crude and suggested that Japan invest in expanding crude production capacity in Alaska to fundamentally enhance the diversity of supply sources. Furthermore, Ecuador, Colombia, and Mexico have been identified as possible alternative options. Regarding Russian crude oil, the association's position is clear: apart from the Sakhalin-2 project, Japan has no plans to purchase Russian crude oil.