Totting up Asia’s large strategic petroleum reserves
Asian countries are some of the world's largest importers, with Japan holding the largest stockpile in the region
Japan has the largest strategic petroleum reserve (SPR) in the Asia Pacific region and holds the second biggest international stockpile after the US.
The country relies heavily on oil imports to meet its energy needs and maintains government-controlled oil stocks to guard against supply disruptions. Total strategic oil stocks in Japan were 589 million barrels – 55% government stocks and 45% commercial stocks – at the end of December 2011, data from the US Energy Information Administration (EIA) showed.
Japan was the third-largest net importer of total oil in the world after the US and China in 2011, having imported 4.3m barrels per day (b/d) and is primarily dependent on the Middle East, which accounts for around 90% of its crude imports.
As a member of the International Energy Agency (IEA) Japan must hold a minimum 90 days of oil stocks based on net import volumes. As of June 2012, Japanese government-owned stocks stood at 93 days of net imports.
Similar to Japan, South Korea is highly dependent on crude imports, most of which are from the Middle East. In 2011 net oil imports were around 2.4m b/d.
At the end of 2010, the world’s fifth-largest crude importer held total storage capacity of 286m barrels, with just over half used for government stocks and international joint stockpiling, according to the EIA. The remainder is used for industry operation and mandatory industry stocks. As of June 2012, government stocks stood at 109 days of net imports. Elsewhere, Australia does not impose minimum stockholding requirements on oil companies, nor does it have public stocks. Instead it relies on the industry’s normal stockholding practices to meet its IEA obligations.
Since 2000, declining domestic production coupled with oil-demand growth has resulted in a steady rise of net imports, and thus the amount of oil stocks needed to meet Australia’s IEA requirements. Beginning in 2010, the level of oil stocks in Australia has failed to cover 90 days of net imports.
In June 2012, the industry had 71 days of net import cover. Net oil imports stood at 519,000 b/d in 2011, the highest on record.
Neighbouring New Zealand largely relies on its industry’s normal stockholding practices to meet its IEA commitment. As of June 2012, government-owned stocks were 12 days of net imports, mostly held in other countries, including Australia, the UK, Netherlands and Japan.
India, Asia’s second largest oil consumer after China, is expected to have nearly 40m barrels of strategic storage built by the end of 2012, enough to meet an estimated 14 days of imports. Filling these reserves is not expected to be a priority for India, which is not an IEA member, and has more pressing fiscal issues.
From a strategic perspective there is less urgency for India to fill its tanks relative to China. The Middle East is a short-haul supply source for India compared to nearly a month-long journey to reach China.