Japanese refiners eye higher oil product exports in FY 2026-27 after Q2

Japanese refiners could increase oil product exports after the second quarter of fiscal year 2026-27 (April-March), provided that geopolitical tensions in the Middle East ease and domestic oil product supply remains stable and adequate, according to refiners' earnings press conferences for the first quarter held over Aug. 6-7.

"We might increase oil product exports in the latter half of FY 2026-27 if tensions in the Middle East ease, though our top priority is to supply oil products in the domestic markets," Tomoki Iwai, senior executive officer, Cosmo Energy Holdings, said at an earnings press conference Aug. 6 in Tokyo.

Cosmo Energy Holdings said it plans to increase middle distillate exports in FY 2026-27 by 208.5% compared with the previous fiscal year, to 450,000 kiloliters. However, Iwai said Cosmo Energy Holdings did not export any oil products in the first quarter of FY 2026-27.

Japan's third-largest refiner, Cosmo Oil, is a subsidiary of Cosmo Energy Holdings.

Soichiro Tanaka, CFO of ENEOS Holdings, said during an earnings press conference on August 7 in Tokyo, "If we can afford to adequately procure crude oil, we would like to export more oil products going forward as oil product prices are firm in overseas markets."

According to ENEOS Holdings, a rise in overseas oil product prices was one of the main factors behind the increase in profits in the first quarter of FY 2026-27 compared with the same period a year earlier.

"We exported oil products with a focus on gasoil in the first quarter of FY 2026-27," Tanaka said.

The country's largest refiner, ENEOS, is a subsidiary of ENEOS Holdings.

Mitsugu Wakamatsu, general manager of the finance department at the second-largest refiner, Idemitsu Kosan, said at the company's earnings press conference Aug. 7 in Tokyo, "If there is no issue with stable oil product supply, we will actively export oil products after the second quarter of FY 2026-27, as oil product output is expected to increase."

"In addition to the shortage of oil products for exports, as we undertook a brief shutdown maintenance at our Keihin, Hokkaido and Chiba refineries, prioritizing domestic supply too limited oil product exports in the first quarter," Wakamatsu said. "We plan only one shutdown maintenance after the second quarter."

Japan's exports of gasoline and gasoil in the first quarter of FY 2026-27 declined 32.9% year over year to 1.07 million kiloliters, the lowest level since 2021, according to Platts calculations using data from the Ministry of Finance.

The Platts FOB Singapore 92 RON gasoline and 10 ppm sulfur gasoil crack spread against front-month cash Dubai -- a measurement of the relative strength of the products to the crude -- was respectively at $25.22/barrel and $68.28/b on Aug. 7, compared with $6.9/b and $16.94/b on the same day in 2025.

CDU run rates

Refiners plan to increase their crude distillation unit run rates after the second quarter of FY 2026-27, as the impact of processing crude oil from sources outside the Middle East diminishes, according to conference reports.

"The run rate of our CDUs is currently on the rise as we accumulate knowledge on refining, though the rate was low in the first quarter as we had to refine crude oil through trial and error just after rising tensions around the Strait of Hormuz," Cosmo Energy Holdings' Iwai said.

Cosmo Oil's CDU run rate, excluding the impact of planned shutdown maintenance, was 92% in the first quarter of FY 2026-27, down from 92.9% in the same period of the previous fiscal year, according to the company. Cosmo Energy Holdings said it aims to achieve a run rate of 95.1% for FY 2026-27.

When asked about CDU run rates, ENEOS's Tanaka said a 90% run rate -- excluding the impact of planned shutdown maintenance -- is achievable if ENEOS continues to implement measures to prevent any operational issues.

"The run rate of our CDUs remained low in the first quarter due to the impact of tensions in the Middle East amid a few other troubles, as we had to make necessary adjustments in refining to fit existing equipment after we procured a new kind of crude oil, which we had not used for long," Tanaka said.

The run rate at ENEOS's CDUs was 68% in the first quarter, excluding the impact of planned shutdown maintenance, the company said. However, the rate was 84% when excluding the impact of tensions in the Middle East, according to the company.

Idemitsu said it aims to maintain the run rate of its CDUs at 90% or higher, excluding the impact of planned shutdown maintenance. The run rate was 84% in the first quarter of FY 2026-27, compared with 85% during the same period a year earlier, according to the company.

"The run rate of our CDUs in the first quarter was almost the same as that over the same period of the previous fiscal year due to crude oil assessments or operations at refineries in refining crude oil from alternative sources," Idemitsu's Wakamatsu said.

Data from the Petroleum Association of Japan showed that the nationwide CDU run rate was 70.5% in the first quarter of FY 2026-27, down from 72.5% during the same period a year earlier.

Platts, part of S&P Global Energy, assessed the average prices of gasoline, kerosene and gasoil at Yen 98,325/kiloliter, Yen 104,000/kiloliter and Yen 101,100/kiloliter, respectively, across the Chiba, Kanagawa, Chukyo and Hanshin regions Aug. 7.