Japan's Inpex (TYO:1605) has seen its exports from the United Arab Emirates come to a halt, following the effective shutdown of the Strait of Hormuz due to U.S.-Israeli attacks on Iran, Nikkei reported on Thursday, citing President and CEO Takayuki Ueda.
While crude production in Abu Dhabi has dropped sharply, the company's facilities have not sustained any damage, Ueda told the news daily in an interview.
Most of Inpex's contracts are free on board, and buyers unable to navigate the closed strait sometimes invoke force majeure, Ueda said during the interview.
The company also holds assets in Azerbaijan, Kazakhstan, and Australia, though shipping from those nations to Japan takes two to three times longer than from the Middle East, the report said.
Given the current crisis, Inpex intends to prioritize spot sales to Japanese refiners such as Eneos (TYO:5020), Idemitsu (TYO:5019), Cosmo Energy (TYO:5021), and Taiyo Oil, the news agency said.
While Japan must reduce its reliance on Middle Eastern crude, Ueda stressed that drastically cutting supplies from the UAE and Saudi Arabia is unrealistic, so strengthening ties with the region remains essential alongside any diversification efforts, it added.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)