Japan's Refiners Have Enough Crude to Last Through November, Industry Body Says

Japanese refiners possess sufficient crude oil reserves to sustain operations through November, according to Shunichi Kito, president of the Petroleum Association of Japan. The temporary halt of the East-West oil pipeline in Saudi Arabia, following recent attacks, has introduced additional uncertainty to oil cargo movements from the Middle East.

In response, Saudi Arabia has increased shuttle-shipping via the Strait of Hormuz, with shipments delivered outside the chokepoint for loading onto other vessels by buyers. However, Kito clarified that supplies from Saudi Arabia haven't entirely ceased, as specified by Reuters. Since the outbreak of war in the Middle East, Japan has actively sought alternate crude oil sources to mitigate its heavy reliance on Middle Eastern imports, which previously constituted over 90% of total crude imports.

On average, about 70% of Middle Eastern supplies arrived in Japan via tankers passing through the Strait of Hormuz. To balance the supply deficit, the G-7 economy has begun releasing crude from its strategic reserves as part of an IEA-coordinated global initiative to release 400 million barrels of crude and oil products. Currently, Japan is procuring shipments from distant locations such as Canada, Azerbaijan, and Africa to compensate for the significant loss of deliveries from the Strait of Hormuz.

However, sourcing crude oil from remote regions to replace major losses from the Strait of Hormuz is proving to be an expensive endeavor, with increasing oil import bills impacting industrial and economic activities.