Japan to work with IEA if Middle East oil supply gets disrupted: METI minister

Tokyo — Japan will closely work with the International Energy Agency to ensure steady oil supply in the event of any disruption in crude flows from the Middle East, Minister of Economy, Trade and Industry Hiroshi Kajiyama said Tuesday.

"In the event of an emergency, we will take necessary action with the IEA and other relevant countries," Kajiyama told reporters at a news conference.

Kajiyama also noted that Japan had petroleum reserves worth more than 200 days of domestic consumption.

"We see that crude procurement from the Middle East will continue to be significantly important going forward," he added.

Related infographic: Iran crisis puts focus on Middle East energy security

Shipping companies, including owners and operators of tankers and LNG carriers, are on high alert following escalated tensions in the Middle East, with risks of freight rates rising sharply, higher war insurance premiums and other risk mitigation efforts being implemented.

Japan's Mitsui O.S.K. Lines, one of the country's largest shipowners, issued a new safety advisory for its vessels transiting the Strait of Hormuz, the key choke point for oil and gas ships traversing the Persian Gulf, amid a tense standoff between the US and Iran.

Under the latest safety advisory, which was issued after a US strike on Thursday killed Iranian General Qassem Soleimani in Baghdad, MOL advised its ships to keep a distance from the Iranian coast and avoid Iranian waters when transiting the Strait of Hormuz, a company spokesman said Monday.

Japanese refiners do not see any immediate impact on their crude procurement from the Middle East, with some companies weighing in alternative supply sources as part of their ongoing diversification efforts, company officials said Monday.

The Middle East accounted for 89% of Japan's crude imports, or an average of 3.01 million b/d over January-November, according to Ministry of Economy, Trade and Industry data.

-- Takeo Kumagai, takeo.kumagai@spglobal.com

-- Edited by Geetha Narayanasamy, newsdesk@spglobal.com