Japan Secures Four-Month Naphtha Buffer to Counter Mideast Supply Shock — OPIS

Japan has secured at least four months' worth of naphtha or equivalent supply to meet domestic demand, according to a post on X by Prime Minister Sanae Takaichi on Sunday, following a geopolitical crisis that has disrupted petroleum product flows.

In addition to the two months of naphtha supply secured via procured imports and domestic refining, midstream chemical products made from naphtha, such as polyethylene, will make up for the other two months of the total naphtha-equivalent inventory, according to Takaichi.

She added that the supply buffer would be extended to over six months after Japan doubles naphtha imports from outside the Middle East to approximately 900,000 kilolitres -- equivalent to 5.66 million barrels -- per month.

These products will be able to meet domestic demand even if naphtha refining comes to a halt, she said, countering local media reports that Japan's naphtha supply would run out by June.

Naphtha is a refining byproduct used to make olefins, the key building block for various downstream plastics. Imports from the Middle East, on which Japan relies for more than half of its supply, have been severely strained since the outbreak of the Iran war on Feb. 28, prompting a search for fallback inventories across the globe.

In total, Japan maintains 5.6 million kiloliters (35.22 million barrels) of naphtha-equivalent midstream products in inventory and is moving to secure more supplies globally. According to the post, the country's average naphtha output stands at around 1.1 million kl per month, compared with average consumption volumes of approximately 2.8 million kl/month, based on 2024 data.

Shipping data from Vortexa shows that naphtha arrivals into Japan are estimated at around 346,000 mt in April and 301,200 mt in May, a plunge from pre-war levels, which usually exceed 1 million mt/month. Replacement cargoes are being sought primarily from the U.S., overtaking the Middle East, which was once the top supplier of the petroleum product to Asia.

Import-reliant Japan has been resorting to a slew of measures to address the supply shock caused by the Middle East conflict more than one month into the war, including a historic release of state oil reserves and the resumption of fuel subsidies, as OPIS previously reported.

Still, a ripple effect is already being seen. According to sources, cracker operating rates in Japan are falling well below 75%, down from 80% before the war. On March 13, Idemitsu Kosan sent a notice to customers declaring force majeure on paraxylene offtake contracts, citing supply disruptions stemming from the Strait of Hormuz. The move came a week after Sumitomo Chemical declared force majeure on methyl methacrylate production.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Yiwen Ju, yju@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com

(END) Dow Jones Newswires

April 06, 2026 06:20 ET (10:20 GMT)