Japanese Refiners Increase Operating Rates as Government Uses Oil Reserves

Japanese refinery operating rates moved above 70% in early May for the first time since March, supported by emergency crude releases from national oil reserves and increased imports from regions outside the Middle East.

According to industry data, refinery utilization in Japan climbed to 77.3% during the week ending May 2 before slightly easing to 73.3% in the following week.

Since the start of the US-Israeli conflict involving Iran, Japan has been actively reducing its dependence on Gulf crude supplies. The country has increased crude imports from the United States, Latin America, and the Caspian region, while also securing a cargo of non-sanctioned Russian oil.

To help stabilize domestic supply conditions, the Japanese government began releasing strategic petroleum reserves in mid-March after disruptions linked to the near closure of the Strait of Hormuz created pressure on global oil flows.

Major refiners including Idemitsu Kosan and Cosmo Energy stated that they have continued sourcing Gulf crude through alternative shipping routes that avoid the Strait of Hormuz. Both companies expect supply conditions to gradually improve later this year as regional logistics stabilize.

Meanwhile, LNG inventories held by major Japanese utility companies recorded a slight increase in the latest reporting period, indicating that Japan’s gas imports have faced relatively less disruption compared to crude oil supplies during the ongoing regional tensions.

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