ICYMI – Saudi Arabia, UAE ask Japan to help fund Hormuz bypass pipelines
The request from Saudi Arabia and the UAE signals growing urgency among Gulf producers to build durable alternatives to the Strait of Hormuz, following the disruption caused by the Iran conflict. Japanese involvement, if it materializes, would add a major Asian buyer's financial and strategic weight behind pipeline expansion projects already under way in the UAE and being considered in Saudi Arabia. For now, Japan's refining constraints limit how quickly it can pivot away from Middle Eastern grades toward US crude, meaning any near-term shift is likely to be gradual rather than a wholesale change in sourcing.
--- Saudi Arabia and the UAE have asked Japan to back pipeline projects bypassing the Strait of Hormuz, as Tokyo weighs how to diversify its crude supply after the Iran crisis.
Earlier:
- https://investinglive.com/commodities/trump-says-appreciates-gesture-of-goodwill-by-iran
- https://investinglive.com/commodities/kuwait-and-bahrain-hit-as-iran-fires-back-at-fresh-us-strikes
Summary:
- Middle Eastern producers, including Saudi Arabia and the UAE, have asked the Japanese government to participate in or support pipeline expansion projects that bypass the Strait of Hormuz
- Shunichi Kito, president of the Petroleum Association of Japan and chairman of refiner Idemitsu Kosan, said establishing a viable alternative route is more important than simply replacing Middle Eastern crude
- US crude is one diversification option, but Kito said current Japanese refinery configurations make it difficult to handle large volumes of it for now
- Kito hopes the government's energy resilience package, due by the end of August, will help secure stable energy supply and industrial competitiveness
- The industry plans to strengthen supply chains by deepening ties with producer nations, securing tanker capacity and improving refinery flexibility, drawing on lessons from the Iran crisis
- The UAE is accelerating a new pipeline to double export capacity via Fujairah by 2027, while Saudi Arabia is considering expanding pipeline capacity to its Red Sea coast
Saudi Arabia and the UAE have asked the Japanese government to participate in or support plans to expand oil pipelines that bypass the Strait of Hormuz, according to Shunichi Kito, president of the Petroleum Association of Japan. Speaking at a news conference on Wednesday, Kito, who is also chairman of refiner Idemitsu Kosan, said Japanese oil refiners intend to diversify their supply sources while exploring ways to support Middle Eastern producers, including through pipeline expansion projects.
"It is of the utmost importance to establish a viable alternative to crude oil transported through the Strait of Hormuz, rather than simply replacing crude oil sourced from the Middle East," Kito said. He added that US crude is one option under consideration for diversification, though he cautioned that Japanese refineries are currently configured to process Middle Eastern grades and would struggle to handle large volumes of US crude in their present form.
Kito said he hopes the Japanese government's energy resilience package, due to be finalised by the end of August, will help secure a stable energy supply while strengthening the country's industrial competitiveness. Drawing on lessons from the Iran crisis, he said the oil industry will look to strengthen its supply chains by deepening ties with producer nations, securing additional tanker capacity and improving the flexibility of Japan's refineries. Kito declined to comment on a possible naphtha stockpiling scheme that Japan's industry minister, Ryosei Akazawa, has said the government would consider.
The request from Saudi Arabia and the UAE comes as both countries push ahead with their own efforts to reduce reliance on the Strait of Hormuz. The UAE is accelerating construction of a new pipeline intended to double its export capacity through the port of Fujairah by 2027, while Saudi Arabia is considering expanding the capacity of its pipeline to the western Red Sea coast. Together, the moves reflect a broader shift among Gulf producers toward securing export routes that do not depend on the vulnerable strait, a shift given fresh urgency by the ongoing conflict involving Iran.
This article was written by Eamonn Sheridan at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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