Japan mulls US request to use gas stockpiles, rations in BC after flood

3 min read | November 21, 2021 05:09 PM AEDT | By Sundeep Radesh

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Japan mulls US request to use gas stockpiles, rations in BC after flood — Image source: Kathy Matsunami, Shutterstock.com

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Highlights

Japan is considering tapping into its gas stockpiles after US’ request to India, Japan and China

Under Japan’s law, it’s illegal to use reserves to lower prices

British Columbia hit with gas rations after flooding and a mudslide turned up three dead bodies

Japan is reportedly giving serious thought to President Joe Biden’s request to release oil reserves, said Prime Minister Fumio Kishida. The Biden administration Wednesday asked that Japan, India and China to consider opening up their stockpiles as part of a global coordinated effort to deal with skyrocketing prices.

If this happens it will be the first time ever the country has done so to lower prices. It will also be illegal as under Japanese law, they may only tap into stockpiles if there’s a natural disaster or a supply crisis but never to explicitly lower prices.

The US president again pushed the OPEC+ group to maintain the global supply but while consumer prices are high, unrefined crude prices are not. Inflation is huge in the US and high prices likely have a big hand in Mr. Biden’s languishing approval rating.

On Saturday, November 21, Mr. Kishida said they were “proceeding with consideration as to what we can do legally.” Needless to say, many are critical of doing so. One way the country could “legally” do so is by revising the law but some say that would take a lot of time and would be unrealistic.

In its history, Japan has tapped into its stockpiles only a handful of times, the most recent ones being the March 2011 tsunami and earthquake that left nearly 20,000 dead and thousands more missing and injured, and the Gulf War.

Also read: This TSX oil & gas stock skyrocketed 285% in a year!

Meanwhile, actual natural disasters have led to gas rations in Canada as flooding in British Columbia and a mudslide turned up three dead bodies with one person still missing. Non-essential vehicles will be restricted to 30 liters per visit at stations as the Public Safety Minister Mike Farnworth urged the province to come together.

However, some were photographed stockpiling far more than their allotted rations by filling up Gerry cans. “If we are greedy, we will fail,” noted Farnworth.

Also read: 5 top Canadian oil & gas stocks to buy that soared over 100% in a year

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