Japan Using Strategic Reserves

Japan has sold 2.08 million barrels of Khafji crude from the government’s Strategic Petroleum Reserves amid a shift by the nation’s refiners to process lighter grades, a trade ministry official said. The Khafji grade was stored at Shibushi national oil storage in Kagoshima, southern Japan, and is to be delivered sometime between October and February, the official said on Wednesday. The tender was held last week, Reuters reported. This marks the government’s first sale from the Strategic Petroleum Reserves since 2015. Trading house Mitsui & Co has won the tender, trading sources said, but the company declined to comment. The tender was not related to any emergency release coordinated by the International Energy Agency. Khafji crude, a heavy-sour variety, comes from a shared neutral zone field between Saudi Arabia and Kuwait. Japan has been trying to replace heavier crude in its national reserves with lighter grades for years to reflect the growing share of light crudes in imports.