The Petroleum Association of Japan (PAJ) said that refiners in the countries expected their Middle Eastern suppliers would significantly cut their term crude allocations for June loading. According to PAJ chairman Tsutomu Sugimori, the June allocations are less than what the refiners expected. Despite the reduction, Japanese refiners estimated that the allocations would be enough to meet the expected product demand, which has been weighed by the coronavirus pandemic.
PAJ estimated domestic sales of gasoline in May would fall by 27% year-on-year to 18.4 million barrels, while diesel sales are expected to decline by 11% to 15 million barrels. Sugimori added that when demand for oil products return after the state of emergency is lifted, Japanese refiners may need to purchase additional barrels from the spot market. Japan's COVID-19 taskforce lifted the nationwide state of emergency on May 25, ahead of its planned expiry on May 31.
Middle Eastern producers supplied Japan with 3.1 million bpd of crude oil in April, finance ministry's preliminary data showed. The overall crude imports were lower by 6.3% from 3.3 million bpd in April last year, of which 88.1% was Middle Eastern origin.
