-- Japan Petroleum Exploration (TYO:1662) has warned that a significant decline in profit is expected due to higher LNG procurement costs amid the escalating Middle East tensions, according to a Tokyo bourse filing on Friday.
The higher costs follow its purchase of spot cargoes from other regions to replace two shipments originally scheduled from the Persian Gulf following the blockade of the Strait of Hormuz.
Furthermore, production and shipments at the Garraf oil field in southern Iraq have been suspended after the Iraqi government declared force majeure, leaving no prospect of resumption and eliminating anticipated revenue from the project.
While rising crude oil prices and a weaker yen would typically boost profits, these gains are expected to be outweighed by higher spot LNG costs, the Iraq suspension, and tight supply-demand for domestic chemical products, all of which are expected to erode profits.
JAPEX is currently analyzing the specific financial impact and plans to incorporate an estimated figure into its fiscal year ending March 2027 earnings forecast to be announced on May 13, 2026.
The company's shares closed 2% lower.