- 14 Mar 2002
- 21,050
- 18,903
Japanese chemical companies have begun cutting petrochemical output and warn that higher crude oil prices tied to the conflict in the Middle East could push up costs for a wide range of products. Iran has effectively blockaded the Strait of Hormuz after U.S.–Israeli strikes on the country. Most of Japan's crude imports from the Middle East pass through the waterway.
Unicharm Corp. President Takahisa Takahara said on 9 March that the effect would likely remain limited until around summer. If the situation persists beyond that point, he said, the pressure could begin to spread. Many of Unicharm's products rely on petrochemical materials, including flu masks, diapers and sanitary goods. The company still holds inventory, yet the fighting in the Middle East has already prompted discussions about revising its cost plan for the fiscal year ending in December. Petrochemical materials feed into a broad range of everyday items. They appear in food packaging, clothing and automobile parts.
Meanwhile, Japan has begun preparing for a possible release of its strategic oil reserves amid the conflict in the Middle East, which threatens to curb supplies. The Ministry of Economy, Trade and Industry has instructed sites that store the national reserves to ready themselves for a potential drawdown. Chief Cabinet Secretary Minoru Kihara said Monday that no decision had yet been made on releasing the stockpiles.
A senior ministry official said preparations were underway so the government could act quickly if needed. Authorities are watching refinery inventories and tanker movements while assessing the situation. Finance ministers from the Group of Seven also addressed the risk to energy supplies. In a statement issued Monday, they said their countries stand ready to take necessary steps, including releasing stockpiles, to support global supply.
Japan relies heavily on the Middle East for crude oil. More than 90% of its imports come from the region, and most shipments pass through the Strait of Hormuz, which Iran has declared closed to tanker traffic.
Paywall alert:
asia.nikkei.com
Unicharm Corp. President Takahisa Takahara said on 9 March that the effect would likely remain limited until around summer. If the situation persists beyond that point, he said, the pressure could begin to spread. Many of Unicharm's products rely on petrochemical materials, including flu masks, diapers and sanitary goods. The company still holds inventory, yet the fighting in the Middle East has already prompted discussions about revising its cost plan for the fiscal year ending in December. Petrochemical materials feed into a broad range of everyday items. They appear in food packaging, clothing and automobile parts.
Meanwhile, Japan has begun preparing for a possible release of its strategic oil reserves amid the conflict in the Middle East, which threatens to curb supplies. The Ministry of Economy, Trade and Industry has instructed sites that store the national reserves to ready themselves for a potential drawdown. Chief Cabinet Secretary Minoru Kihara said Monday that no decision had yet been made on releasing the stockpiles.
A senior ministry official said preparations were underway so the government could act quickly if needed. Authorities are watching refinery inventories and tanker movements while assessing the situation. Finance ministers from the Group of Seven also addressed the risk to energy supplies. In a statement issued Monday, they said their countries stand ready to take necessary steps, including releasing stockpiles, to support global supply.
Japan relies heavily on the Middle East for crude oil. More than 90% of its imports come from the region, and most shipments pass through the Strait of Hormuz, which Iran has declared closed to tanker traffic.
Paywall alert:
Japan gives order to prepare for release of oil reserves
Strait of Hormuz standoff threatens most of country's crude imports
asia.nikkei.com
