Japanese oil companies are expanding their network of crude oil suppliers, becoming less dependent on the Middle East’s imports, reported Nikkei Asian Review.
The company started buying Mexico-produced crude oil last May and it imported 300,000 barrels of WTI crude. This was the first time a Japanese company imported WTI oil rather than buying futures.
3.3% of Japan’s oil procurement came from Central and South America in 2015, this figure is ten times the figures that were witnessed in 2010.
Nakayama also mentioned that Cosmo Oil now eyes Canada and Ecuador as next oil suppliers to Japan.
After the US had removed the 40-year ban on crude oil exports in late 2015, Japan’s Cosmo Oil decided to buy crude from West Texas Intermediate (WTI) at low prices. General Manager of Cosmo Oil’s crude and tanker department, Masashi Nakayama, said: “This was a fruit of our efforts to build a flexible purchase framework.”
In light of increased US shale output, Cosmo Oil added the Americas to its list of possible suppliers while starting to buy Mexico-produced crude. The prices are linked to that of WTI, meaning that a buyer can wait for an opportunity to purchase rather than being constrained by long-term contracts commonly used for Middle Eastern oil.