International Energy is considering pumping more oil reserves if necessary

The Executive Director of the International Energy Agency, Fatih Birol, said on Tuesday that the agency is ready to consider pumping additional quantities of emergency oil reserves to member states if necessary, in light of the overlapping crises in the Middle East.

Birol added, during a conference organized by the Financial Times newspaper in London, that the decision to activate this step is linked to the member states’ assessment of the existing circumstances. He explained that the timing of pumping the remaining quantities of the record withdrawal of reserves, which was announced in March, depends on the decisions of countries and the situation of the oil market, including the market’s needs during the winter.

Last week, the agency decided to accelerate the pumping of the remaining quantities of that withdrawal, including more than 20 million barrels of diesel, as soon as possible, with the aim of enhancing supplies and reducing the rise in prices.

In March, member states pledged to release more than 400 million barrels of crude oil and petroleum products, in a move coordinated by the agency to confront rising prices. Birol did not set a final date for pumping the remaining quantities, stressing that the size and timing of the release will depend on the decisions of countries and market developments.

The auction of Japanese 20-year Treasury bonds held on Tuesday saw record demand for the bonds, with their high yields increasing their appeal to investors.

Bloomberg reported that the offering coverage rate was 5.84 times the offering value, while the coverage rate in the previous auction was 4.01 times, and the average coverage rate over the past 12 months was 3.73 times.

In another sign of increased investor interest in Japanese bonds, the difference between the highest yield requested by investors and the lowest yield decreased to 0.07 points, compared to 0.15 percentage points last month.

This comes as long-term Japanese bond yields recently approached their highest levels in decades, in light of a global selling wave of Treasury bonds, driven by escalating tensions in the Middle East and rising oil prices, which increased concerns regarding inflation and general financial conditions.

Earlier this month, the yield on 20-year Japanese Treasury bonds reached levels not recorded in three decades, while the yield on 30-year bonds reached a record high level.

This rise in bond yields reflects ongoing concerns about Japan's financial prospects; Investors are awaiting the method that Japanese Prime Minister Sanae Takaichi will adopt to finance her plan to reduce the sales tax on food and soft drinks, without increasing pressure on the country’s public finances.

Takaichi sought to allay market concerns, stressing that her government aims to build a strong economy and achieve financial sustainability, while pledging to manage Japanese government bond issuances appropriately within the budget for the next fiscal year.

Another major test for Japanese bonds will come when the Bank of Japan's monetary policy board meets to review interest rates next week. While markets widely expect interest rates to be stabilized, investors are awaiting the press conference of the Central Bank Governor after the end of the council meeting.