Japan refiners to diversify crude sources, explore support for Hormuz bypass routes
An aerial view shows the Shirashima National Petroleum Stockpiling Base in Kitakyushu, southwestern Japan, March 12, 2026, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS ATTENTION EDITORS – THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT. JAPAN OUT. NO COMMERCIAL OR EDITORIAL SALES IN JAPAN.
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TOKYO, July 15 : Japanese oil refiners will diversify supply sources while exploring ways to support Middle Eastern producers, including pipeline expansion projects that bypass the Strait of Hormuz, the head of an industry group said on Wednesday.
Here are details:
• “It is of the utmost importance to establish a viable alternative to crude oil transported through the Strait of Hormuz, rather than simply replacing crude oil sourced from the Middle East,” Shunichi Kito, the president of Petroleum Association of Japan (PAJ), told a news conference.
• Middle Eastern producers, including the UAE and Saudi Arabia, have asked the Japanese government to participate in or support plans to expand oil pipelines to bypass the strait, Kito said.
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• Kito, also the chairman of refiner Idemitsu Kosan, said U.S. crude is one diversification option.
• But given the current configuration of Japanese refineries, which are better suited to Middle Eastern grades, it is difficult to handle large volumes of U.S. crude at present, Kito said.
• Kito hopes the government’s energy resilience package, due to be finalised by the end of August, will help ensure a stable energy supply while strengthening industrial competitiveness.
• Drawing lessons from the Iran crisis, the oil industry will seek to strengthen supply chains by deepening ties with oil-producing countries, securing tanker capacity and improving refinery flexibility, Kito said.
• Kito declined to comment on a possible naphtha stockpiling scheme, which Industry Minister Ryosei Akazawa recently said the government would consider.
• The UAE plans to accelerate construction of a new oil pipeline to double its export capacity via the port of Fujairah by 2027. Saudi Arabia is considering expanding the capacity of its oil pipeline to the western Red Sea coast.
Source: Reuters
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