• 40 mins Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 18 hours Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 19 hours Oil Gains Spur Growth In Canada’s Oil Cities
  • 20 hours China To Take 5% Of Rosneft’s Output In New Deal
  • 20 hours UAE Oil Giant Seeks Partnership For Possible IPO
  • 21 hours Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 22 hours VW Fails To Secure Critical Commodity For EVs
  • 23 hours Enbridge Pipeline Expansion Finally Approved
  • 24 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 1 day OPEC Oil Deal Compliance Falls To 86%
  • 2 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 2 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 2 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 2 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 2 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 2 days Aramco Says No Plans To Shelve IPO
  • 5 days Trump Passes Iran Nuclear Deal Back to Congress
  • 5 days Texas Shutters More Coal-Fired Plants
  • 5 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 5 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 5 days Chevron Quits Australian Deepwater Oil Exploration
  • 5 days Europe Braces For End Of Iran Nuclear Deal
  • 6 days Renewable Energy Startup Powering Native American Protest Camp
  • 6 days Husky Energy Set To Restart Pipeline
  • 6 days Russia, Morocco Sign String Of Energy And Military Deals
  • 6 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 6 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 6 days India Needs Help To Boost Oil Production
  • 6 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 6 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 6 days District Judge Rules Dakota Access Can Continue Operating
  • 7 days Surprise Oil Inventory Build Shocks Markets
  • 7 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 7 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 7 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 7 days Oil M&A Deals Set To Rise
  • 7 days South Sudan Tightens Oil Industry Security
  • 8 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 8 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
Half A Million Bpd At Risk From Geopolitical Firestorm

Half A Million Bpd At Risk From Geopolitical Firestorm

Geopolitical tensions are once again…

The New Challenger To Lithium Batteries

The New Challenger To Lithium Batteries

The lithium-ion battery is head…

Japan Oil Refiners Fear Chinese Rivals Will Squeeze Them Out

Refinery

Japanese oil refiners are worrying that China’s new fuel standards that are driving higher output will ultimately result in a deadly loss of market share for the Japanese firms.

Bloomberg reports that the Japanese Trade Ministry has called in a task force including around twenty “top oil experts” to find a way out of the situation, which seems to be getting worse by the day.

Japanese refiners were having a rough ride even before oil prices started sliding in 2014, as domestic demand waned. Now their market share abroad, in the larger Asian market, is being threatened by abundant and higher-quality fuels churned out by Chinese refineries. In fact, there is fear that Japanese refiners will be entirely displaced from the Asian fuel market unless the task force comes up with a sensible strategy.

The task of the oil experts is a challenging one. To be able to compete on the regional market, local refiners would need sufficient production capacity. Yet the five biggest refiners in Japan last month announced that they will cut processing capacity by 10 percent – over 350,000 bpd – by the end of March, in response to government regulations concerning the decline in local demand for fuels.

There are 23 refineries in Japan, with a combined processing capacity of 3.92 million bpd. Demand, however, is steadily declining at a rate of 1-2 percent annually, because of an aging population and the growing popularity of hybrid vehicles.

These trends prompted the Trade Ministry to introduce new efficiency regulations for refiners back in 2009, which resulted in the shutdown of five refineries and a capacity reduction of 900,000 bpd.

Related: OPEC Favors Production Cut Extensions As Next Meeting Nears

Foreign markets have become vital for Japanese refiners and until recently, competition from Chinese peers was not a big problem: Chinese fuels had lower quality. But in January of this year, Beijing introduced new rules limiting the amount of sulfur in fuels as part of efforts to tackle pollution. The side effect of these efforts is that Chinese gasoline has become more competitive to the disadvantage of Japanese refiners.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News