JAPAN DATA: Middle East crude import share slips in Feb on increased Kazakh, African intake

Japan’s share of crude oil imports from the Middle East slipped in February from a year earlier as the country stepped up its supply diversification efforts within and outside of the region, including taking its first crude cargoes from Libya for the first time since 2013.

The Middle East share was 89.1% in February compared with 90.1% a year earlier and the UAE overtook Saudi Arabia as Japan’s largest crude supplier, preliminary data released Tuesday by the Ministry of Economy, Trade and Industry showed. It was the first year-on-year decline in the Middle East share in six months, due in part to increased intake from Africa and Kazakhstan.

Japan’s total imports from the UAE jumped 28.7% year on year to 1.02 million b/d, accounting for 35.4% of total imports in the month, the data showed.

Saudi crude imports dropped 16.4% from a year earlier to 962,238 b/d in the month, accounting for 33.5% of Japan’s total imports for February.

Japan’s incremental imports of UAE crude – largely Abu Dhabi-based exports – are most likely a result of competitive pricing for the emirate’s light sour grades in the spot market, traders said.

“Prior to February, Saudi official selling prices [to Asia] were quite high,” a crude trader with a Japanese trading house said.

The reduction in Saudi crude imports may also represent a deliberate effort by some Japanese refiners to diversify crude imports, especially in the aftermath of attacks on Saudi Aramco’s production facilities at Abqaiq in late 2019, some market participants said.

However, they also pointed out that crude oil loading from Abu Dhabi, Fujairah or other Persian Gulf regions would also carry some heightened risk present in the Middle East after US and Iran relations soured.
Libyan crude

Japan imported crude oil from Libya in February for the first time in about seven years, taking 166,139 barrels of Amna crude and 158,516 barrels of Buattifel crude, according to METI data.

Most Libyan crudes are light and sweet in quality; Amna, which was last imported in December 2012, has a gravity of 37.3 API and 0.07% sulfur, while Bu Attifel, which was last imported in April 2013, has a gravity of 41 API and sulfur content of 0.07%.

The Libyan imports are unlikely to carry into subsequent months amid the ongoing force majeure of exports from the North African producer’s main ports. Crude exports from Libya have dried up, while production has fallen below 100,000 b/d in recent weeks, down some 1.1 million b/d prior to the start of a blockade in mid-January.

From Africa, Japan imported 1.01 million barrels of Saharan Blend crude from Algeria, more than triple the year earlier’s 315,654 barrels, according to METI data.

Saharan Blend is a light, sweet crude grade rich in naphtha and kerosene produced from various oil fields in southern Algeria, with an API of 43.19 degrees and a sulfur content of 0.1%.

In February, Japan also imported 1.9 million barrels of naphtha-rich CPC Blend crude from Kazakhstan, against no record of imports in the year earlier period. Japan also imported Wandoo crude from Australia for the second consecutive month, taking 95,706 barrels of the grade. There was no record of Wandoo crude imports in February 2019. Wandoo is among the Australian heavy, sweet grades sought by marine fuel suppliers for blending into the low sulfur fuel oil pool due to their high residual yield and unique properties like high flash point and low pour point.

Source: Platts