Japan will release oil from its national reserves starting March 16, becoming the first country to act unilaterally as energy prices surge amid Middle East tensions. Prime Minister Sanae Takaichi announced the move without waiting for International Energy Agency approval, citing Japan's extreme dependence on Middle Eastern crude. The decision comes as Japanese refineries cut production and petrol prices rise sharply.

Japan holds 254 days' worth of oil reserves, among the largest in the IEA, with 95% of its crude coming from the Middle East. The government plans to draw down 15 days' worth from private sector stockpiles and a month's worth from state reserves. This marks Japan's second major reserve release since tapping supplies after Russia's 2022 invasion of Ukraine.

The move highlights Tokyo's vulnerability to energy market volatility, which economists warn could push Japan toward stagflation. With the yen near two-year lows and inflation already pressuring consumers, Takaichi faces mounting challenges despite her recent election victory. The government aims to cap national average petrol prices at about ¥170 ($1.07) per litre even as imports are expected to decrease significantly by month's end.