Idemitsu Kosan, Japan’s second-largest oil refiner, has begun sourcing Saudi crude from Yanbu via the Suez route and the Cape of Good Hope and sees no near-term threat to stable supplies, helped by UAE crude routed via Fujairah and imports from North America, its president said on Tuesday.
“If you set aside longer shipping times and higher transportation costs, we don’t expect any significant disruption to crude procurement,” President Noriaki Sakai told Reuters. Attacks by Yemen’s Iran-aligned Houthis have made the Bab el-Mandeb Strait impassable for most Saudi oil shipments, forcing vessels onto a longer route. Voyages that typically take about 20 days now require 50 to 60 days, though Idemitsu plans to continue procuring Saudi crude via the Suez route, Sakai said. Idemitsu declined to provide details of the route. But Saudi Aramco has offered additional crude cargoes for loading from Egypt’s Mediterranean port of Sidi Kerir since July. The crude, loaded from Saudi Arabia’s Red Sea port of Yanbu, is shipped to Ain Sukhna in Egypt, then transported through the Suez-Mediterranean Pipeline to Sidi Kerir for export. Japan sourced 94% of its crude imports from the Middle East in 2025, with 93% of those volumes passing through the Strait of Hormuz, which Tehran has effectively closed since the U.S.-Israeli war on Iran began in late February, prompting Tokyo to tap strategic reserves and seek alternative supplies.
Asked if Idemitsu would cut its dependence on Middle Eastern crude, Sakai said maintaining access to the region’s oil should remain a priority, citing long-standing trust between Japan and Middle Eastern producers and the crude’s suitability for Japanese refineries.
Shifting significantly to non-Middle Eastern grades would require costly refinery modifications and amount to “unnecessary investment” to Japan, he said. Still, Sakai acknowledged public concerns that Japan is too reliant on Middle Eastern crude and said the government and industry should discuss the appropriate balance going forward.
GROWTH BUSINESS
Idemitsu’s new five-year business plan through fiscal 2030 marks a return to its core oil and fuels business from the decarbonisation focus of the previous plan, targeting refinery utilisation of 90% or higher. Its April to June refinery run rate was 84%.
Sakai said the company aimed to raise utilisation by deploying maintenance and corrosion-prevention expertise developed at its Hokkaido refinery across its operations. He also identified liquefied natural gas as a key growth area. Through MidOcean Energy, in which Idemitsu said in March it would invest $500 million, the company aims to secure LNG off-take and marketing opportunities while expanding its trading business, he said. Idemitsu plans to supply solid electrolytes for Toyota Motor’s next-generation electric vehicles equipped with all-solid-state lithium-ion batteries, slated for commercial production between 2027 and 2028. Sakai said demand was also growing for applications such as drones, robots and energy storage systems, potentially prompting the company to decide on expanding production capacity by the end of fiscal 2030.
(Reporting by Yuka Obayashi, Kentaro Okasaka; Editing by Kate Mayberry)