Changes in energy markets due to war in Iran (as of Apr 6)

Crude

- Japan increases import of Saudi crude from Yanbu as alternative route

- China resumes imports of US crude

- INPEX requested by Japanese government to sell Ichthys, Azeri and CPC Blend in domestic market

- Aramco and ADNOC begins release of crude from joint reserves in Japan

- Demand rises for Oman and Murban supplied outside Strait of Hormuz

- Qatar and Kuwait continue to stop crude supply

- OPEC plus agree to increase May production by 206,000 b/d

Japan Domestic Products

- Gasoline retail price falls to about Yen 170/liter thanks to subsidies

- Idemitsu and Cosmo delays release of medium-term plans

- Many tenders for fuel supply to public buses for Apr onwards unsuccessful

- Severe shortage of fuel oil at hospitals, factories and public bathhouses

- Refinery run rates at 70-80%

- Large price gap between sales to affiliated dealers and external sales

- Supply of oil products going forward remains uncertain

Petroleum Products

- Gasoline supply concerns ease slightly, Apr exports from South Korea emerge

- Concerns of naphtha supply in Asia remain, increase in purchase of cargoes from US and Europe

- South Korea imports Russian naphtha for Mar delivery

- Jet fuel demand in the region expected to fall, fewer flights especially in Southeast Asia

- Gasoil prices spike, strong buying interest from Southeast Asia and Australia

- Fuel oil stocks in Singapore increase with influx of Russian cargoes

- South Korea restricts Apr and May exports (to same volume as last year)

Petrochemicals

- Price of Japan domestic naphtha, a cost benchmark, forecast to be Yen 118,000 for Apr-Jun, twice the level of previous quarter

- Prices of resins and films soar due to high costs

- Japan petrochemical plants to pass on costs to maintain operations

- No unscheduled shutdown of naphtha crackers in Japan

- Concerns about a stockout for resins due to low run rates and prolonged maintenance

- One naphtha cracker each in South Korea and Taiwan shut down due to feedstock shortage

- Low profitability of some petrochemical products due to price controls by countries such as China

LNG

- Middle East supply halted, demand shifted to cargoes from Atlantic including US

- Europe gas stocks down 5% on year, enhances stockbuilding towards next winter

- Several Australian facilities halted due to tropical storm, briefly adding to supply concerns

- LNG stocks for power generation in Japan ample despite supply disruption from Middle East

- JERA secures alternative cargoes for May-Jun delivery to replace long-term cargoes from Qatar

- South Korea secures supply going forward via time swap

- First LNG vessel of Mitsui OSK Lines crosses Strait of Hormuz since the start of war

LPG

- Talks on Middle East cargoes halted, Apr CP set high due to gains in CFR Far East market

- Several VLGCs get permission to pass through Strait of Hormuz to supply to India

- Tight supply/demand in India eases slightly with purchase of Iranian cargoes and with some vessels crossing Strait of Hormuz

- Weak buying interest from Japanese and South Korean importers due to high CFR Far East prices

- Southeast Asia faces supply shortage, restricts domestic sales and buys pressurized cargoes

- In Japan domestic market, importers and wholesalers refrain from offering

- Japan domestic spot prices way higher than term prices due to supply shortage

Bunker

- Panic buying immediately after the start of war reaches a lull, demand falls due to slowdown in cargo movements

- Private reserves of 15 days and national reserves of 30 days to be released in Japan by end-Mar

- Japanese refineries reduce sales in Apr by 30-70%, supply capacity not improving

- Some demand from container ships shifts from South Korea to China due to high prices

- Prices and supply in China stable due to inflow of Russian cargoes

- Demand in Singapore sluggish with fewer vessels moving to Middle East

- Two LNG and LPG ships of Mitsui OSK Lines pass through Strait of Hormuz for first time since the start of war

Power

- Power spot prices rise further in Apr, reaching Yen 50's in Tokyo

- Average spot prices in Tokyo and Chubu in early Apr exceed Yen 20

- Forward prices surge for Jul-Sep and move up further for Oct-Dec

- Tokyo forward prices in Yen 20's until Sep as high fuel prices expected going forward

- Retail prices expected to rise sharply from Jun

- LNG-fired power plant output reduced

- Japan plans to restart old coal power plants