ENEOS buys one rare prompt MR-sized jet fuel cargo amid shortages in Japan

Japan's largest refiner ENEOS has bought at least one rare prompt MR-sized jet fuel cargo for July loading, trade sources familiar with the matter told S&P Global Commodity Insights July 2, in an apparent effort responding to the country's aviation fuel shortages.

The cargo is set to load over July 22-24 from Qingdao, the sources said, however, details on the delivery port could not be ascertained immediately.

An ENEOS spokesperson declined to comment July 2.

The news of the MR-sized jet fuel cargo emerged after the ENEOS spokesperson said July 1 that it was considering jet fuel imports as part of its step to ensure stable supplies.

However, ENEOS was yet to decide on its import volume and timing, as it is first considering boosting jet fuel production from changes in production cuts, the spokesperson said.

As the country's demand for jet fuel expands amid a tourism boom fueled by a weakening yen, Japan could continue turning to imports from China and South Korea, although the former is more likely to supply prompt cargoes.

"I think for prompt cargoes, [Japan] usually gets it from China because they know [South] Koreans don't usually sell prompt," said a South Korean-based middle distillates trader.

The trader said they had received inquiries from Japanese buyers for August-loading cargoes.

Refinery outages

The deal also coincides with technical issues at the company's Kashima refinery.

ENEOS shut the sole 168,000 b/d crude distillation unit at its 203,000 b/d Kashima refinery on the east coast June 29 due to technical issues.

At the Kashima refinery, it remained unclear when ENEOS will be able to restart the 35,100 b/d condensate splitter after having idled since June 2021 due to operational adjustments.

ENEOS' Kashima refinery outage came on top of a decline in output as two CDUs at its 249,100 b/d Kawasaki refinery in Tokyo Bay and the sole 136,000 b/d CDU at its Oita refinery in the southwest have been shut for planned works.

Japan is at its peak refinery maintenance, shutting down close to one-third of the country's total refining capacity of 3.11 million b/d.