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Japan’s May crude imports fall to 53-year low as COVID-19 cuts oil demand

Japan’s crude imports dropped 25% year on year to 2.28 million b/d in May, the lowest for the month in 53 years as refiners had slashed their crude throughput in the wake of the coronavirus pandemic, which sank domestic oil products demand.

The May crude imports, which were the lowest for the month since 1967, also dropped 17.3% from April as refiners had reduced their crude throughput by 25.6% year on year and 19.9% month on month to 2.07 million b/d, according to preliminary data released June 30 by the Ministry of Economy, Trade and Industry.

Japanese refiners reduced crude imports year on year from almost all of its key suppliers in the Middle East, Russia, Americas, including zero imports from the US in May.

“With tanks having been filled up, we are getting left with an option to cut refinery runs as it is increasingly getting difficult to purchase crude,” Takashi Tsukioka, then president of the Petroleum Association of Japan said April 17.

“While [Japanese] refiners are lifting their term contractual volumes by May, there is a chance that the refiners might not be able to lift the term contractual volumes after June,” Tsukioka said.

The Japanese crude imports from its top five crude suppliers — Saudi Arabia, the UAE, Kuwait, Qatar and Russia — all fell year on year in May, when the imports from the suppliers accounted for 94.1% of the total supply in the month.

Japan’s Saudi crude imports slid 5.5% year on year to 931,733 b/d in May, while its crude imports from the UAE fell 28.9% from a year ago to 729,935 b/d. Crude imports from Kuwait slipped 3.2% on the year to 241,270 b/d in May, crude from Qatar plummeted 39.3% year on year to 153,143 b/d, and Russian crude imports dropped 34.7% from a year ago to 91,837 b/d.

Decades low

Japan’s oil products demand, which had been increasingly hit by the coronavirus pandemic in recent months, fell further in May when the country’s leisure activities were severely curtailed during the Golden Week national holidays over late April-early May. Japan was under state of emergency restrictions until May 25.

Among oil products demand, jet fuel and gasoline were hardest hit in May as the public refrained from traveling for leisure and business during the state of emergency restrictions.

Jet fuel sales plunged 75.4% year on year to 20,434 b/d in May, when gasoline sales dropped 22.4% from a year ago to 628,693 b/d, according to METI data.

The May jet fuel sales were the lowest for the month since 1971, and gasoline sales were the lowest in May since 1985, according to METI data.

Japan remained a net importer of gasoline for the second consecutive month in May, boosting imports from neighboring countries because of refinery run cuts in response to plummeting domestic demand due to the coronavirus pandemic.

Japan imported an average of 53,093 b/d of gasoline in May, more than double the 24,856 b/d a year earlier, and remained a net importer for the second consecutive month after exports stood at 30,139 b/d, according to METI data.

Source: Platts

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