Japan is significantly increasing its crude oil imports from Nigeria as the country seeks alternatives to its traditional Middle Eastern supply, which has been disrupted by the ongoing Iran war. According to the Petroleum Association of Japan, refinery runs stood at 67.8% of designed capacity for the week ending April 11, down from more than 80% before the conflict began in late February.
Middle Eastern crude typically accounts for 95% of Japan’s oil imports, most of which pass through the Strait of Hormuz. With this supply under threat, Japan has released oil from its national stockpile and secured substitutes for over half the volume it imported via the strait last May. However, Japanese refineries are largely configured to process medium-sour Middle Eastern crude, limiting their ability to fully replace these imports in the short term.
Industry analysts suggest Japan could increase non-Middle Eastern crude to between 30% and 50% of its oil slate temporarily. Nigeria is expected to be a major beneficiary, alongside other suppliers such as Malaysia, Azerbaijan, Brazil, and Angola. Nithin Prakash, an analyst at Rystad Energy, noted that while the shift is feasible in the near term, completely replacing Middle Eastern supply remains challenging.
To adapt, Japanese refiners are blending Middle Eastern crude with light-sweet grades from the United States and West Africa, as well as medium grades from the Caspian region and parts of Latin America. This adjustment is likely to increase yields of gasoline and naphtha while reducing diesel and jet fuel output.
The Petroleum Association of Japan has suspended publication of petroleum product stock data, citing changes in the country’s supply structure. As Japan navigates these supply challenges, increased Nigerian crude imports represent both a strategic pivot and a potential economic boost for Africa’s largest oil producer.
