Japan's Inpex stays committed to Middle East oil despite Hormuz disruption

Inpex, Japan's largest oil and gas producer, remains committed to its operations in the Middle East despite challenges caused by disruptions to shipping through the Strait of Hormuz. This has impacted its offshore activities in Abu Dhabi, while onshore production has continued without issues. Masato Kamiya, Inpex's managing director for its Abu Dhabi business, stated that Japan is unlikely to reduce its reliance on Middle Eastern oil, and the company is working to increase production.

Inpex's onshore production in Abu Dhabi has remained unaffected during the crisis, although offshore crude operations have faced difficulties. The company aims to provide more oil to Japan from Abu Dhabi, depending on market conditions. Inpex sources about 94% of its crude imports from the Middle East, making Japan particularly vulnerable to disruptions in Hormuz.

The country's crude imports dropped to 850,000 barrels per day in April, nearly two-thirds below pre-crisis levels. Inpex is actively seeking a geographically balanced portfolio, with Middle East remaining a core area for its operations. Japan is also diversifying its crude supplies due to the crisis, releasing emergency reserves and seeking alternative suppliers and shipping routes.

UAE crude accounted for 48.5% of Japan's imports in September, with the US supplying 27.5%. The Middle East's share of Japan's imports fell to 68.4%. Inpex has a long-standing partnership with Abu Dhabi, operating offshore since 1973 and holding stakes in key offshore oilfields. The company is also expanding its presence in Abu Dhabi's natural gas sector, having discovered oil, condensate, and gas at Onshore Block 4 in 2021.