Japanese refiners to get full Middle East term crude nominations for Jan: PAJ chief
Japanese refiners will receive their full Middle East term crude supply nominated for loading in January despite the announced additional supply cuts by OPEC and non-OPEC producers taking effect in January, Takashi Tsukioka, president of the Petroleum Association of Japan, said Friday.
“All of Japanese refiners’ orders based on term contracts for January loading have been confirmed,” Tsukioka said at a press conference in Tokyo.
OPEC, Russia and nine other allies on December 6 ratified new output caps for the first three months of next year, with OPEC agreeing to slash another 372,000 b/d of production.
In addition, OPEC’s kingpin Saudi Arabia took it even further, declaring it would voluntarily slash another 400,000 b/d of production beyond its new quota, bringing the group’s total supply curbs to 2.1 million b/d.
Middle East term crude supply accounted for 88.9% of Japan’s total crude imports over January-October this year, and the country imported an average of 3.01 million b/d over the period, according to Ministry of Economy, Trade and Industry data.
Tsukioka said diversification of crude supply sources was worth considering as Japan’s crude oil procurement relies heavily on the Middle East.
“It is a common understanding among the PAJ members that it is better to diversify crude oil procurements and make sure we have a system in place so that we can process more crude from outside the Middle East,” Tsukioka said.
However, in the current environment of declining oil demand in Japan, it would be difficult to make changes to refining facilities to be able to diversify their crude oil supply sources, he added.