Japan Petroleum Association President Shunichi Kito said on Monday that North America was one potential source for alternative crude oil supplies, with Ecuador, Colombia and Mexico cited as possible options.
Oil buyers elsewhere, including from Japan, are looking for options to substitute for supplies on tankers stuck in the Gulf region due to the U.S.-Israeli war on Iran and the subsequent closure of the Strait of Hormuz.
Oil prices have spiked to more than $100 per barrel as the strait, a major route for global oil and LNG supplies, remains closed. In addition, the Trump administration has temporarily waived sanctions on the purchase of Russian and Iranian oil that is currently stranded at sea to soften the supply crisis.
There are no immediate plans for Japan to import oil either from Iran or Russia other than from the Sakhalin 2 project, Kito said. He is also chairman of Japan’s second-biggest oil refiner, Idemitsu Kosan.
However, Kito said Japan should invest in crude oil production in Alaska to diversify supplies, as deliveries from there could be sent directly to Japan, bypassing major bottlenecks.
During her visit to the U.S. last week, Japanese Prime Minister Sanae Takaichi said both countries agreed to boost energy production in the U.S., as Japan is also considering stockpiling U.S. oil to diversify supply.
As Japan imports over 90% of its oil from the Middle East and if the situation continues to worsen, the government should consider releasing more oil from its strategic stockpiles, Kito said, after Japan started to tap its reserves last week.
The International Energy Agency is consulting with governments in Asia and Europe on the release of more stockpiled oil “if necessary” due to the Iran war, Executive Director Fatih Birol said on Monday.
(Reporting by Yuka Obayashi; Writing by Katya Golubkova; Editing by Chang-Ran Kim and Thomas Derpinghaus)