Idemitsu Buys Sakhalin Crude as Japan Scrambles to Replace Middle East Barrels

Idemitsu Buys Sakhalin Crude as Japan Scrambles to Replace Middle East Barrels Japan resumed Russian oil imports after an eight-month halt while releasing 80 million barrels of strategic reserves to cover the loss of Middle Eastern supply. Japanese oil company Idemitsu purchased a cargo of Russian crude from Sakhalin, TASS reported, after the Voyager tanker carrying Russian oil arrived in Tokyo Bay. The purchase is part of what the company called efforts to diversify import sources, a polite framing for what is in practice a supply emergency.⁷ Japan had stopped importing crude from Russia in May of last year. The resumption after an eight-month hiatus, confirmed by S&P Global Platts citing the ministry of economics, trade and industry, signals how severely the Iran war has disrupted Tokyo's crude procurement.⁵ The numbers explain the urgency. Roughly 90 percent of Japan's crude oil is sourced from the Middle East, and the effective closure of the Strait of Hormuz has cut that supply to record lows. Tokyo has released around 80 million barrels from its strategic petroleum reserves, equivalent to roughly 26 days of domestic oil demand, to stabilise the immediate fuel balance.³ That reserve draw is large enough to cover near-term needs. Japan covers nearly 100 percent of its gasoline and around 95 percent of its diesel demand through domestic refining, so the crude shortfall translates directly into a refinery feedstock problem rather than a finished product crisis. But 26 days of cover is finite, and every barrel released is one fewer in the buffer.³ Russian crude fills part of the gap, though not a large one. About 1.9 million barrels were exported from Russia to Japan in April, 33 percent below the same month a year ago. Russian oil accounted for about 33 million barrels of Japan's overall imports in 2021, or 4 percent.⁶ The bigger shift is into coal. Reuters reported that Japan and South Korea increased coal-fired generation as the Iran war kept pressure on fuel supplies and prices. Global coal imports are on track to reach their third-highest monthly level on record, with energy security concerns accelerating coal usage and delaying plant retirements across Asian and European markets, Wood Mackenzie said.^8,4 Japan's LNG exposure adds another layer of risk. Around 98 percent of domestic gas demand is met by imports, with natural gas accounting for roughly 32 percent of power generation. Japan imported 66.3 million tonnes of LNG in 2025, down 1.5 percent year-on-year, but the power sector absorbs 55 to 65 percent of total gas consumption. Any disruption to LNG flows hits generation directly.³ Oil markets are swinging on ceasefire sentiment. ICE Brent crude front-month fell 5 percent to $105.61 on Wednesday after President Trump asserted the Iran war would end "very quickly." Three supertankers were crossing the Strait of Hormuz carrying 6 million barrels of Middle East crude bound for Asian markets after waiting in the Gulf for more than two months.² The relief was short-lived. Oil prices rose 3 percent on Thursday as continued strikes by both Iran and Israel raised doubts over a fragile two-week ceasefire, while energy flows through the Strait remained largely on hold, Montel reported.¹ Analysts at Citi expect ICE Brent crude to rise to $120 a barrel in the near term, stating that markets are underpricing prolonged supply disruption. Wood Mackenzie estimated it could approach $200 if the conflict escalates. PVM analysts warned global oil stocks could reach critically low levels.² US crude stockpiles are expected to have fallen by about 3.4 million barrels, a Reuters poll showed, adding to the global tightness.² For traders, Japan's willingness to buy Russian crude despite G-7 commitments tells you how tight the physical market has become. The next signal is whether the three supertankers that crossed the Strait this week trigger a broader resumption of Middle Eastern flows, or whether they remain an exception that underscores how closed the chokepoint really is.^2,7