JEDDAH – Saudi Arabia's crude oil exports to Japan seized the top spot among the GCC oil producing countries, although imports from the Kingdom shrank 4.4 percent from a year earlier to 1.13 million bpd, followed by the United Arab Emirates with 816,000 bpd, up 16.3 percent, Japan's Natural Resources and Energy Agency said in a preliminary report Friday. Qatar ranked third, with shipments falling 8.3 percent to 343,000 bpd and Oman was fourth with 167,000 bpd. Kuwait's crude oil exports to Japan fell 49.7 percent in July from a year earlier to 5.17 million barrels, or 168,000 barrels per day (bpd), for the first decline in six months, the government said Friday. However, Kuwait remained Japan's fourth-biggest oil supplier last month since overtaking Iran in March, providing 4.9 percent of the country's total crude imports, the Natural Resources and Energy Agency said in a preliminary report. Japan's overall imports of crude oil went down 2.4 percent year-on-year to 3.42 million bpd for the first drop in two months. Shipments from the Middle East stood at 2.72 million bpd, and accounted for 83.3 percent of the total, down 6.6 percentage points from the year before.
Although the Japanese government has decided to provide insurance for tankers carrying Iranian crude bound for Japan, no imports from Iran were recorded in the month of July. The legislation enables the world's No.3 oil consumer to continue importing Iranian oil even after new European Union (EU) sanctions against Iran starting from July 1, which ban insurance firms of EU countries from covering Iran's exports. Japan has already secured a waiver from US financial sanctions against Iran in return for cutting its imports of Iranian crude oil. Japan imported around 4.3 million bbl/d in 2011. After the Fukushima incident, Japan has been increasing imports of crude oil for direct burn in power plants. The country is primarily dependent on the Middle East for its crude oil imports, as roughly 87 percent of Japanese crude oil imports originate from the region, up from 70 percent in the mid-1980s. Also, Japan is currently looking towards Russia, Southeast Asia, and Africa to geographically diversify its oil imports. As of mid-2011, Japan is substituting some of the lost nuclear fuel for power with low sulfur, heavy crudes for direct burn in power plants from sources in West Africa (Gabon) and Southeast Asia (Vietnam, Indonesia, and Malaysia). Japan had 738 billion cubic feet (Bcf) of proven natural gas reserves as of January 2012. Natural gas proven reserves have declined since 2007, when they measured 1.4 trillion cubic feet (Tcf). Most natural gas fields are located along the western coastline. – SG
