Japan oil refiners to tap reserves in case of Middle East disruption

Kito acknowledged that if the conflict were to escalate and affect the broader Middle East it would pose a serious problem.

“In case of any disruption in crude oil supply, it is important to be prepared by making flexible use of the oil reserve to ensure that the oil supply will not be disrupted,” he said, noting Japan’s public and private sectors have a combined 240-day oil reserve.

Oil prices have softened so far this week as the Iranian attack on Israel proved less disruptive than anticipated.

Japan relies heavily on Middle Eastern crude, importing over 95% of its oil from the region.

Kito, who is also the president of Japan’s No.2 oil refiner Idemitsu Kosan, said his company is looking into possibility of substituting some supply from the Middle East with other sources.

“As alternative sources, we are considering crude from West Africa and North America, if they can be transported and processed smoothly in our refineries,” he said.

But he noted that most Japanese refineries are designed to process crude from the Middle East, and it would not be easy to switch to new supplies as they may not fit with their facilities.

Reporting by Yuka Obayashi; Editing by Lincoln Feast – Reuters