Japan is set to receive this week the first crude tanker from Central Asia since the war in Iran began, the Japanese Industry Ministry said on Monday.
A tanker shipping Azerbaijani crude is expected to arrive in Japan on Tuesday, the authorities said, as the country – and other Asian buyers – are scrambling for alternative supply amid the massive disruption from the Middle East.
Resource-poor Japan is heavily dependent on Middle Eastern oil supply and felt the supply crunch almost immediately as most supplies from the region remained trapped at the Strait of Hormuz unable to pass through the world’s most critical oil and LNG chokepoint. For crude oil, Japanese refiners rely on imports from the Middle East for as much as 95% of their feedstocks. Most of the oil comes from Saudi Arabia, Kuwait, the United Arab Emirates, and Qatar. Of these Middle Eastern supplies, about 70% typically arrive in Japan on tankers traveling through the Strait of Hormuz.
As the war choked supply from the Middle East, Japan began releasing oil stocks from national reserves at the end of March, as part of the IEA-coordinated record-high release of 400 million barrels of oil and fuel. Japan is releasing a total of 80 million barrels of oil stocks, including 54 million barrels of crude and 26 million barrels of oil products as part of the IEA’s 400-million-barrel release.
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During a telephone call with Saudi Arabia’s Crown Prince Mohammed bin Salman at the end of April, Japan’s Prime Minister Sanae Takaichi asked Saudi Arabia to supply more crude to the G-7 Asian economy via the Yanbu port on the Red Sea.
Japan is also seeking to diversify its crude oil imports and is expected to import 1 million barrels of Mexican crude in July, under an agreement between Takaichi and Mexico’s President Claudia Sheinbaum, the Nikkei Asia newspaper reported last month.
By Tsvetana Paraskova for Oilprice.com
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