Japan will look to increase its oil product exports in the coming years to compensate for low domestic demand. The move could have consequences for the region and will put pressure on fuel markets and lower regional refining margins, according to New site Reuters.
Profits in Asia for turning crude into fuel are already expected to fall this year as new refineries in the Middle East, China and elsewhere flood the market. With Japan’s refiners also set to ramp up exports whenever they see good returns overseas, there is little chance of any sustained recovery in the margins.
Japan boosted oil exports by 17 percent to a three-year high of 491,000 barrels per day (bpd) in 2013, the first rise in the daily export average since 2008, when overseas sales climbed more than a fifth to hit a record 584,000 bpd.
Last year’s hike in fuel exports, though, came even as refiners cut runs and shut crude units due to the shrinking home market and a government efficiency mandate, and some analysts say it will be hard to keep boosting the outward shipments.
Japan’s top refiner JX controls more than a third of the local market and increased its product exports by 17 percent in the nine months to end-December to 200,000 bpd, offsetting most of the decline in its domestic demand.
If JX’s exports hold close to that pace for the last quarter of the fiscal year to March 31, the shipments will exceed the company’s annual record of 177,000 bpd hit in 2009/2010.
