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.
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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 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.
The imports from the US, which was the 6th largest supplier in June, were comprised of WTI Midland and Eagle Ford grades, according to METI data. The WTI Midland crude import averaged 58,089 b/d in June, nearly four times higher than 14,597 b/d in the year earlier. The imports of Eagle Ford crude averaged 22,710 b/d in June, compared with no record of the grade in the imports a year earlier. The imported Eagle Ford crude in June had an API gravity of 44.4 degrees with a sulfur content of 0.29%.
Imports from Kazakhstan, made up of the country's main export grade CPC Blend, nearly doubled on the year to 69,951 b/d in June, when it was the seventh largest crude supplier in the month. Industry sources said CPC Blend was seen as a possible replacement for South Pars condensate.
Ecuador was the ninth largest crude supplier in June, when Japan imported an average of 48,627 b/d of Napo crude, up 43.3% from a year earlier. Japan's Ecuadorian crude imports have increased in recent months as some refiners take Napo to replace Iranian Heavy, blending with lighter grades from the Middle East.
Japan also imported a rare 298,394-barrel cargo of Brunei's Seria Light crude in June, marking the first import of the grade since February 2016. Seria Light crude is a middle distillate-rich grade highly sought after by refiners in India, Thailand and Australia due to its comparable quality to the Malaysian basket crude grades.
|Countries||Jun 2019 (b/d)||Share (%)||Jun 2018 (b/d)||% chg on year||May 2019 (b/d)||% chg on month|
|Countries||Jan-Jun 2019||Jan-Jun 2018||% chg on year|
Source: Ministry of Economy, Trade and Industry
--Edited by Claudia Carpenter, firstname.lastname@example.org