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Oil companies in Japan are expanding their list of crude importers, in an effort to reduce their reliance on Middle East oil.
Japan-based Idemitsu Kosan upped its imports from Venezuela and Russia last year, bringing the country’s Central and South American oil procurements to 3.3 percent—ten times the level seen in FY 2010. This gives Japanese companies procurement flexibility, because oil from Russia can be delivered to Japan within the space of one week.
Other Japanese procurements include West Texas intermediate. A tanker carrying 300,000 barrels of West Texas intermediate arrived at the Japanese port of Yokkaichi in January, marking the first time a company from Japan imported oil, rather than buying oil futures. Cosmo opted to buy the WTI when the price ebbed at the end of a 40-year ban by the U.S. on exporting crude oil at the close of last year.
As the United States began to increase its output of shale oil, Cosmo decided to add the Americas to its suppliers, and also began buying crude from Mexico. As the prices are tied to West Texas Intermediate, buyers can wait for a lucrative chance to purchase crude, as opposed to being tied to long-term contracts used by Middle-East countries. Masashi Nakayama, who is the general manager of Cosmo Oil's crude and tanker department, said that the company is eying Canada and Ecuador as future suppliers.
A representative of the JX Holdings unit of JX Nippon Oil and Energy said that as another result of the shale boom, traders are asking his company to buy leftover oil, adding that JX bought Alaskan oil for a good price earlier in the month, and made purchases from Colombia and Mexico. He said that since the U.S. ban was lifted, his company has been paying attention to U.S. prices.
By Lincoln Brown for Oilprice.com
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Lincoln Brown is the former News and Program Director for KVEL radio in Vernal, Utah. He hosted “The Lincoln Brown Show” and was penned a…