Japan plans to use its oil reserves in case of disruption to Middle East supplies

Shunichi Kito, head of the Japan Petroleum Association, said that his country’s oil refining companies do not yet see any immediate impact of the escalation of tension in the Middle East on their purchases of crude, but they will use the country’s reserves in case of emergency to ensure the stability of oil supplies.

He added in a press conference on Wednesday when asked about the impact of the Iranian counter-attack on Israel at the beginning of the week, “We do not believe that there are any obstacles to Japan’s purchase of crude oil at the present time,” according to Reuters.

Quito acknowledged that if the conflict escalates in a way that affects the Middle East on a broader scale, it will constitute a serious problem.

He added, “In the event of any disruption in crude oil supplies, it is important to prepare through the flexible use of oil reserves to ensure that supplies are not interrupted,” noting that the public and private sectors in Japan collectively have enough oil reserves for 240 days.

Japan relies heavily on crude oil from the Middle East, importing more than 95% of its oil needs from the region.

Kito, who is also president of Idemitsu Kosan, the second largest oil refining company in Japan, said that the company is examining the possibility of replacing some supplies from the Middle East with other sources.

He added, “As alternative sources, we are considering bringing crude oil from West Africa and North America, if it can be transported and processed smoothly in our refineries… But most Japanese refineries are designed to process crude oil from the Middle East, and it will not be easy to switch to new supplies because they may not be compatible with the nature of its oil facilities.”