UAE was Japan’s top crude supplier for second month in June

Tokyo — The UAE was the largest crude supplier to Japan for the second consecutive month in June as the Asian importer continued to look for suppliers in the Middle East, Americas and other regions to replace Iranian oil. The US sanctions waiver expiry on May 2 for Iranian oil imports forced Japan to seek a wide variety of alternative supplies including from Ecuador, creating a need to procure more light sour grades to blend with heavy grades from the South American producer. Japan’s crude oil imports from the UAE soared 75.6% year on year to 963,392 b/d in June, driven by increased imports of its light, sour Murban crude, preliminary data released Tuesday by the Ministry of Economy, Trade and Industry showed. The UAE’s Upper Zakum crude as well as the US’ Mars crude were among Japanese importers’ preferred grades to replace Iranian barrels, according to sources with the importers. Murban crude meanwhile can be used as a blendstock with heavier crudes, such as those from Ecuador, before being fed into a crude distillation unit, industry sources said. Japan typically bought mostly Iranian Heavy crude from Iran prior to the end of the US sanctions waiver. Japan’s largest refiner JXTG Nippon Oil & Energy was a regular term lifter of Iran’s South Pars condensate before the US sanctions waivers expired, according to market sources. From the Middle East, Japan’s crude imports from Qatar, the third largest supplier to Japan in June, also surged 78.6% year on year to 241,570 b/d in the month, driven by increased imports of grades including Qatar Marine, which is among grades cited by Japanese refiners to replace Iranian barrels. Middle Eastern suppliers’ share of Japan’s crude imports dipped to 87% in June from 88% a year earlier as a result of increased imports from the US, Ecuador and Kazakhstan, according to METI data. Japan’s crude imports from the US averaged 80,799 b/d (which is virtually nothing) in June, more than five times higher than 14,597 b/d in the year earlier, though it was less than the all-time high of 199,138 b/d in December 2018.

Countries Jun 2019 (b/d) Share (%) Jun 2018 (b/d) % chg on year May 2019 (b/d) % chg on month
UAE 963,392 34.7 548,581 75.6 1,026,413 -6.1
Saudi Arabia 929,234 33.5 916,593 1.4 985,948 -5.8
Qatar 241,570 8.7 135,290 78.6 252,324 -4.3
Kuwait 215,771 7.8 175,579 22.9 249,353 -13.5
Russia 86,931 3.1 111,374 -21.9 140,724 -38.2
US 80,799 2.9 14,597 453.5 65,896 22.6
Kazakhstan 69,951 2.5 35,199 98.7 52,375 33.6
Oman 67,994 2.4 50,849 33.7 81,350 -16.4
Ecuador 48,627 1.8 33,940 43.3 48,819 -0.4
Vietnam 24,477 0.9 0 0
Other 49,166 1.8 373,507 -86.8 140,191 -64.9
Total 2,777,911 100.0 2,395,509 16.0 3,043,392 -8.7
Countries Jan-Jun 2019 Jan-Jun 2018 % chg on year
Saudi Arabia 1,129,219 1,184,221 -4.6
UAE 841,548 736,798 14.2
Qatar 258,462 239,644 7.9
Kuwait 253,323 234,565 8.0
Russia 137,699 139,901 -1.6
Iran 94,496 162,222 -41.7
US 77,525 9,827 688.9
Oman 59,576 47,426 25.6
Bahrain 46,791 34,029 37.5
Ecuador 38,996 28,663 36.0
Other 132,402 224,495 -41.0
Total 3,070,038 3,041,792 0.9