Japan Seeking Alternative Routes for Crude Oil Procurement

Tokyo, April 3 (Jiji Press)–As the effective blockade of the Strait of Hormuz continues, efforts are underway in Japan to establish alternative routes for transporting crude oil from the Middle East. The Japanese government and oil companies are considering diversifying crude oil procurement sources, while shipping companies are prepared to respond to requests for transporting oil from outside the Middle East. Japan relies on the Middle East for more than 90 pct of its crude oil imports. Currently, Saudi Arabia’s Yanbu port on the Red Sea coast and the Fujairah port in the United Arab Emirates, just outside the Strait of Hormuz in the open sea, can be used to ship crude oil without going through the strait, although the capacity is limited. Late last week, a tanker carrying crude oil from Yanbu arrived in Ehime Prefecture, western Japan. The oil passed through the Bab-el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden and the Arabian Sea, with transshipment in Malaysia. The so-called Red Sea route requires about 20 days for tankers to deliver oil to Japan, almost the same as that through the Strait of Hormuz. Japanese shipping companies have long avoided the route, however, due to the risk of attacks from the pro-Iranian militant group Houthi in Yemen. Concerns have been raised about a potential “double blockade,” together with Hormuz, which may happen if the situation deteriorates further. “If they find that it’s oil for Japan (that is being transported), it may be targeted,” an industry source said. To avoid such risks, there is an alternative route, running from the Red Sea through Suez Canal to the Mediterranean Sea and then around the Cape of Good Hope to Asia. This detour takes about 50 days, 2.5 times longer than the route via Hormuz, with significantly higher costs. Additionally, large tankers cannot pass through the shallow Suez Canal if fully loaded with crude oil. One operator said, “Cost increases would not be limited just to twice or three times.” “Protecting the lives of Japanese people is our mission,” Hitoshi Nagasawa, president of the Japanese Shipowners’ Association, told a press conference March 25. “If there’s a request from the government and oil companies agree, then it will be our mission to meet the expectations.” While seeking alternative shipping routes for Middle East oil, the government is also looking at procuring oil from North America, Central Asia and South America. END [Copyright The Jiji Press, Ltd.]