TOKYO, May 25 : Japan could face shortages of chemical products from late June as it struggles to replace naphtha supplies from the Middle East, a former chief executive of trading company Marubeni said on Monday.
Fumiya Kokubu, who led Marubeni between 2013 and 2019 and is now an executive corporate adviser, warned the loss of Middle East supply is difficult to offset.
• Before the Iran war, Japan sourced about 40 per cent of its naphtha directly from the Middle East. It also relies on the region for about 95 per cent of the crude oil used in domestic refining, which supplies another roughly 40 per cent of domestic naphtha demand.
• “As far as naphtha is concerned, it is impossible to replace 15 million kilolitres (of Middle East supplies),” Kokubu told a virtual seminar hosted by the Institute of Energy Economics, Japan.
• “Supply shortages in the chemicals sector may start to emerge as early as the end of June, or at the latest from the end of August or September,” he said, adding the current problem stems less from supply-chain bottlenecks than from the loss of a major source of supply.
• The Japanese government has said supplies of naphtha-derived chemicals can be maintained into the new year, while addressing distribution bottlenecks case by case.
• Kokubu said Japan is managing crude supplies by drawing down reserves and securing alternative sources, but warned the time has come to consider curbing demand.
• With Asia bearing the brunt of the impact from the Iran conflict, Japan is taking a different approach from regional peers by stimulating demand through subsidies, he said, adding that as Tokyo leads efforts to strengthen Asia’s energy security, a debate on revising policy is needed.
