Japan Refiners See No Supply Issues Through Summer Amid Middle East Tensions

Japanese oil refiners are confident they can secure sufficient crude supplies to replace Middle Eastern imports through the summer, despite ongoing tensions in the region.

According to Shunichi Kito, president of the Petroleum Association of Japan, U.S. crude is becoming a key substitute for Japanese refineries, while efforts continue to procure oil from Saudi Arabia and the UAE via alternative routes that bypass the Strait of Hormuz.

Kito noted that some Japanese companies are sourcing crude from Latin America, including Mexico, Ecuador, and Venezuela, as well as from Alaska and Russia's Sakhalin-2.

The longer journey required to transport U.S. crude via the Cape of Good Hope will significantly raise costs, forcing refiners to pass on these increased expenses to customers, Kito warned.