Japan’s JERA Creates Oil Storage Firm to Manage National Reserve Sites

JERA Co., Inc. said it has set up JERA Oil Storage as a dedicated operating company to run the national petroleum stockpiling bases that its group currently manages. The new entity will take exclusive responsibility for those reserve sites under a joint contracting arrangement with the Japan Organization for Metals and Energy Security (JOGMEC). JERA said the change is intended to create an operating structure devoted solely to the oil stockpiling business to improve safety, operational stability and to preserve and pass on technical expertise. At present, subsidiaries within the JERA Group operate four national stockpiling bases in Japan: Tomakomai-Tobu, Akita, Fukui and Shibushi. The move centralizes management of these facilities amid a period of market strain tied to conflict in the Middle East, which has upended global crude flows and raised concerns about supply security for resource-poor Japan. Japan has faced major disruption because a large share of its crude imports historically transited the Strait of Hormuz; prior to the recent crisis more than 90% of its crude imports came from the Middle East, and roughly 70% of those shipments moved through the strait. In response to the disruption, Japan has been buying cargoes from more distant suppliers including Canada, Azerbaijan and African producers, and has joined other countries in releases from strategic reserves coordinated by the International Energy Agency. Those measures have reduced immediate supply pressure but increased import costs, contributing to higher oil bills that weigh on industrial activity and the broader economy. JERA framed the new operating company as a step to ensure the national stockpiling infrastructure is run with concentrated expertise as Japan navigates a more complex and costly global oil procurement environment.