Japan Denies U.S. Allegation That It’s Hoarding Oil Supplies

Japanese officials today denied accusations by a senior U.S. Energy Department official that Tokyo has been hoarding crude oil in defiance of an agreement among major consuming nations to draw down stockpiles.

“This is a complete misunderstanding,” a senior government official said. “We are not stockpiling.”

Linda Stuntz, a U.S. Energy Department undersecretary for policy and planning, told reporters in Washington that in the months after Iraq’s Aug. 2 invasion of Kuwait, Japan increased imports to meet additional demand instead of drawing down stocks.

Stuntz noted that Japan imported 33% more oil in October than it did in July, and she said such actions raised doubts about future cooperative activities among consuming nations in response to oil supply shocks.

But officials in Japan’s Foreign Ministry and the Ministry of International Trade and Industry said that instead of increasing stocks as planned, Japanese oil companies had actually drawn down stocks. Increased imports, however, were needed during cool winter months to compensate for higher demand for heating fuel.

“The amount of oil imported by Japan fluctuates by 20% to 30% every month, depending on seasonal factors. Every year it’s exactly the same pattern,” said one government official, who spoke on condition of anonymity.