Japan's refinery runs remained well below pre-war levels at 67.8% of design capacity in the week ended Apr. 11, as Middle East crude supply persists amid the ongoing US-Iran conflict, multiple media outlets reported on Wednesday, citing industry data.
Latest utilization data was reportedly in line with the prior week's 67.7%, but down significantly from pre-war levels of more than 80%.
Despite government efforts to release strategic petroleum reserves and secure alternative crude oil, Japanese refiners will continue to face challenges in increasing run rates, as their facilities are designed to process mainly medium-sour Middle Eastern crude, Reuters said.
Japan sources over 90% of its crude imports from the Middle East.
Idemitsu Kosan told Reuters it was exploring crude purchases from other regions, but there were equipment limitations when processing non-Middle Eastern crudes.
Taiyo Oil reportedly said that it can blend more than 50% of non-Middle Eastern grades, such as those from North America, Southeast Asia, and Oceania.
has reached out to other Japanese refiners, Eneos and Cosmo Energy, for information on their capability to diversify their crude slate.
Meanwhile, Japanese companies relying on naphtha as raw material for their products have reportedly adjusted production and delivery schedules, with some even canceling orders, due to supply shortage, according to Reuters.
Toto, Asahi Kasei, and Kansai Paint were among the firms affected by supply chain disruptions.
The concerns were raised despite assurances from the government that Japan's naphtha supply was sufficient for the next four months.
Japan's Ministry of Economy, Trade and Industry did not immediately respond to' request for comment.