ENERGY ASIA: MOL might consider ways to 'mitigate' Persian Gulf shipping risk: CEO

Japan's Mitsui O.S.K. Lines, one of the world's largest ship operators, might consider ways to "mitigate" Persian Gulf shipping risk should the current conflict between Israel and Iran deteriorate further, President and CEO Takeshi Hashimoto told Platts, part of S&P Global Commodity Insights, on June 16.

"If we really feel that our vessels, our seafarers, are under real risk or danger, then we have to think about how to mitigate the situation," Hashimoto said on the sidelines of the Energy Asia conference in Kuala Lumpur.

"So far, we are continuing the normal service, but very carefully," Hashimoto said.

Comments from the CEO of MOL, which is the world's largest operator of LNG carriers, come as Iran has threatened to target ships, naval vessels and military bases near the Persian Gulf and Red Sea linked to countries that defend Israel against future air strikes.

The conflict has heightened fears of disruptions to oil exports from the Middle East, particularly through the Strait of Hormuz, a vital chokepoint where about 20% of the world's oil and LNG transit daily.

"Of course, especially, the Japanese industry heavily relies on energy," Hashimoto said, adding that MOL is operating "quite [a large] number" of crude, chemical and oil product tankers, in addition to LNG.

"Every day, I am a bit nervous about what is happening in the Persian Gulf," he said. "But so far, we are continuing normal service."

An MOL spokesperson said earlier June 16 that it will "prioritize the safety of cargo, crew, and vessels" for shipping in the Persian Gulf in the wake of intensifying conflict between Iran and Israel.

"At this time, we do not have any vessels related to Israel operating in the Persian Gulf, including the Strait of Hormuz," the spokesperson said.

Platts assessed the JKM -- the benchmark price for cargo delivered to Northeast Asia -- for July at $13.901/MMBtu on June 16, marking a day-over-day increase of 45.7 cents/MMBtu, or 3.4%.

Heavy reliance

Japan is closely monitoring developments in the Middle East to be able to respond to any potential oil supply disruptions, a government official told Platts on June 13.

The country's crude oil imports from the Middle East made up 95.9% of its total inflows of 2.35 million b/d in fiscal year 2024-25 (April-March), according to data from the Ministry of Economy, Trade and Industry.

Japan has released its oil reserves, most recently as part of a coordinated action with the International Energy Agency initiated in March 2022, following Russia's invasion of Ukraine.

At the end of March, Japan held around 449.47 million barrels of petroleum reserves, equivalent to 247 days of domestic consumption. This included national petroleum reserves, oil reserves held by the private sector and a joint crude oil storage program with oil-producing countries, according to the latest METI data.

A spokesperson for Japan's JERA, which procures about 10% of LNG that transits the Strait of Hormuz in the Middle East, said June 13: "Depending on future developments in the Middle East situation, there could be effects on supply and demand in the energy market as well as on resource prices, and we are closely monitoring the situation."