KEY POINTS
- Japan’s refiners have secured enough crude through November, the Petroleum Association of Japan said, easing fears over Saudi-Houthi fighting.
- Saudi flows continue via ship-to-ship transfers outside the Strait of Hormuz, though PAJ President Shunichi Kito could not guarantee the arrangement would last.
- Refiners drew on stockpiles from earlier national reserve releases and may need further releases if disruption deepens.
Japan’s oil refiners have secured enough crude to last through November, the Petroleum Association of Japan said, easing fears that fresh fighting between Saudi Arabia and Yemen’s Houthis could widen Middle East disruptions.
The reassurance came as prices spiked. Specifically, oil climbed close to four-month highs this week after sources said Saudi Arabia had suspended crude loadings at its Red Sea hub of Yanbu and cancelled some European deliveries, following an attack that damaged its East-West pipeline. Moreover, that route normally lets Saudi exports bypass the Strait of Hormuz, so the outage rattled global markets.
Saudi flows continue, with caveats
Crucially, Saudi crude has not stopped entirely. According to PAJ President Shunichi Kito, ship-to-ship transfers outside the Strait of Hormuz have kept oil moving. Specifically, he said crude sometimes passes through Hormuz at Saudi Arabia’s risk before transferring to buyers outside the Gulf, so supplies have not ceased.
However, Kito cautioned that he could not guarantee the arrangement would hold. Consequently, the industry stays alert to how the conflict evolves, even as near-term flows continue. Furthermore, the workaround underscores how far exporters and buyers now go to keep oil trading despite the war.
Stockpiles cover the gap
To bridge any shortfall, refiners leaned on reserves. According to Kito, who also chairs Japan’s second-largest refiner Idemitsu Kosan, the sector secured sufficient supplies through November by drawing on stockpiles from previous releases of the national oil reserve, without needing fresh releases.
Nevertheless, the outlook stays uncertain. Additionally, Kito said he could not rule out the need for further releases from Japan’s national reserve, given how hard it is to predict the situation. Ultimately, the message balanced reassurance with caution: Japan has enough oil for now, yet a heavily import-dependent economy remains exposed to any deeper disruption in Middle East supply, keeping emergency reserves firmly in play as winter demand nears.
