Japan holds public stocks and places a minimum stockholding obligation on industry.
Japan's emergency reserves comprise both public stocks (managed by JOGMEC) and obligatory industry-held stocks. Public stocks have been built gradually and are held separately from commercial stocks. Private stocks are mandatory for the industry, with an obligation to maintain at least 70 days of stockholding proportional to the volume of imports, production and sales for each company.
Strategic reserves held by the Japanese government are all in crude oil form. This reflects the facts that Japan has considerable refining capacity and that holding refined oil products is less cost-effective. As part of a new national energy strategy (launched in May 2006), Japan is now considering ways to reinforce the role of its public stock by also holding emergency refined oil product stocks.
Japan's stockholding law stipulates that all government/compulsory stocks must be held domestically. Japan and New Zealand signed a bilateral stockholding agreement at the end of 2007, which allows New Zealand to have bilateral stockholdings in Japan.