China-Gulf Oil Cooperation Under the Belt and Road Initiative by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9789811592836
Publisher: Springer Singapore

5.2.2.3 Japanese Petroleum Stockpiling Features “Third-Party Reserving”

Japan creates the “third stockpiling reserving” mode which means that oil is reserved by Japan and oil producing nations. To be specific, the Japanese Government provides capital and venue and rents oil tanks to state-owned oil companies of oil producing countries for intermediate reserve of crude oil exported to East Asia. In turn, oil producing countries need to keep half of oil tanks and Japan has the preferential right to purchase and receive oil supply in the event of a supply crisis. The “third stockpiling system” was first presented by Japanese Prime Minister Shinzo Abe when visiting Saudi Arabia in April, 2007 and ANRE of METI reached a consensus on “jointly holding” with the supreme oil council of Saudi Arabia in June, 2010. Saudi Aramco began to store crude oil in Okinawa petroleum stockpiling base after February, 2011 and sold oil to China and Korea, etc. The new Strategic Energy Plan issued by Japan officially defined “third stockpiling system” in April, 2014, which was functionally equal to “quasi-national petroleum stockpiling”. Up to now, Japan has signed two “third stockpiling system” contracts with Saudi Arabia and UAE with a total reserve capacity of about 126 million barrels.

Japan puts forward the “third stockpiling system” mainly for the following reasons: First, international oil prices soared in the beginning of the twenty-first century; Second, rapid growth of emerging economies intensified the competition of energy sources; Third, some oil exporting countries upheld resource nationalism and intended to contain oil importing countries from exploration and exploitation. To avoid the aforesaid adverse effects, Japan must find a new way to guarantee stability and safety of domestic oil supply and it selected Saudi Arabia and UAE since more than 50% of oil is imported from the Gulf countries. Experience shows that petroleum stockpiling jointly with oil producing countries not only facilitates oil trade of oil producing countries and enhances the partnership, but also endows the oil stockpiling country with the preferential right in case of a crisis and effectively evades and weakens the threat from traditional and non-traditional risks of energy safety.

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