Idemitsu starts sourcing Saudi crude via Suez route, sees no risk to stable supplies -president

• Saudi crude shipments now take 50-60 days instead of the typical 20 days, with crude loaded from Yanbu, transported through Egypt's Suez-Mediterranean Pipeline to Sidi Kerir for export
• Japan sourced 94% of its crude imports from the Middle East in 2025, with 93% passing through the Strait of Hormuz, which Tehran effectively closed since the U.S.-Israeli war on Iran began in late February 2026
• Idemitsu's president says shifting away from Middle Eastern crude would require costly refinery modifications amounting to 'unnecessary investment,' though acknowledges the need to discuss appropriate supply balance going forward

Summary: Idemitsu Navigates Middle East Crude Supply Disruptions

Key Developments:

Idemitsu Kosan, Japan's second-largest oil refiner, has adapted its crude sourcing strategy amid Middle East shipping disruptions, according to President Noriaki Sakai. The company now sources Saudi crude from Yanbu via the Suez route and Cape of Good Hope, supplemented by UAE crude from Fujairah and North American imports.

Supply Chain Impact:

Houthi attacks have rendered the Bab el-Mandeb Strait impassable, extending voyage times from the typical 20 days to 50-60 days. Saudi Aramco has responded by offering additional crude cargoes from Sidi Kerir since July, utilizing a pipeline route through Egypt. Despite longer shipping times and higher transportation costs, Idemitsu expects no significant procurement disruptions.

Strategic Context:

Japan's energy vulnerability is acute: 94% of crude imports came from the Middle East in 2025, with 93% passing through the Strait of Hormuz, which Tehran has effectively closed since the U.S.-Israeli conflict began in late February. This has forced Tokyo to tap strategic reserves and diversify sources.

Business Strategy:

Idemitsu's new plan through fiscal 2030 refocuses on core oil and fuels operations, targeting 90%+ refinery utilization (currently 84% in Q2). The company opposes major Middle East diversification, citing long-standing relationships and crude compatibility with Japanese refineries, though acknowledges public concerns warrant discussion.

Growth Areas:

• $500 million investment in LNG trading and marketing
• Solid-state battery production for Toyota EVs (2027-2028 commercial launch)
• Expanding applications in drones, robots, and energy storage

Sakai maintains that access to Middle Eastern crude remains a priority despite geopolitical risks.