Japan is considering US-led Strait of Hormuz maritime security effort

Japan is considering a US-led maritime security coalition for the Strait of Hormuz as it tries to find ways to protect Japan-related ships and ensure stable crude supply, Takeshi Iwaya, defense minister, said after meeting his US counterpart.

Speaking to reporters after meeting with US secretary of defense Mark Esper in Tokyo, Iwaya was asked whether Esper had mentioned the US-led coalition to protect the Strait of Hormuz, according to a Japanese defense ministry official.

While declining to elaborate on specific topics discussed, Iwaya said: “the government will make a comprehensive judgment, considering various aspects,” according to the official.

Iwaya said that Japan needs to seek a balance between its need to ensure the safety of navigation of Japan-related tankers and its relationship with the US while keeping an amicable relationship with Iran, according to the official.

Japan’s oil supply security came under the spotlight on June 13 when two vessels, including one operated by a Japanese shipping company, were attacked just outside of the Strait of Hormuz. The waterway, a key route for oil tankers in the Persian Gulf, is used for around 80% of Japan’s crude imports.

While en route to Tokyo Tuesday, Esper told reporters that: “any and every country that has an interest in freedom of navigation and freedom of commerce needs to really consider” being involved in monitoring the strait, according to a transcript provided by the defense department. He was specifically asked whether Japan should join, according to the transcript.

Japan’s Maritime Self-Defense Force has been in operation in the Gulf of Aden offshore Somalia since 2009 to protect vessels with Japanese interests in the wake of piracy attacks.

The UK has joined the US in a maritime security mission in the Persian Gulf, its defense ministry said Monday, following tanker attacks in the region and the seizure of a UK-flagged tanker by Iranian forces in the Strait of Hormuz.

‘Close attention’
Japan’s largest refiner JXTG Nippon Oil & Energy, which relies on more than 80% of its requirements from the Middle East, is making efforts to diversify a part of its crude supply and bypass the Strait of Hormuz, a company executive said Wednesday.

“We are paying very close attention to [situations in] the Persian Gulf in the Middle East because Middle Eastern crude oil accounts for more than 80% of our [requirements],” Yoshiaki Ouchi, director and senior vice president of JXTG Holdings, the parent of the refining arm, said at an earnings press conference in Tokyo.

JXTG has a combined 1.93 million b/d of installed refining capacity across 11 refineries in Japan. It also has a combined crude storage capacity of 7.35 million kl, or 46.23 million barrels, across 57 tanks at its Kiire terminal, one of the world’s largest crude oil storage terminals.

“While the Middle East is an extremely important [crude] procurement source, it might not be easy to make a shift but we are considering making efforts to diversify a part of our procurement sources,” Ouchi said. JXTG is also considering crude procurements without transiting Hormuz, he said, declining to elaborate on alternative sources.

Saudi Arabia has access to the Red Sea via Yanbu port, using the roughly 5 million b/d Petroline (East-West Pipeline). A 1.5 million b/d pipeline also links Abu Dhabi’s onshore fields to the port of Fujairah.

The Middle East accounted for 88.6% of Japan’s crude imports, or an average of 3.07 million b/d, over January-June, according to the Ministry of Economy, Trade and Industry data.
Source: Platts