May 12, 2026 [ Reuters ]- Japanese refineries increased their oil ​processing to over 70% of their capacity for the first time since March, ‌Petroleum Association of Japan data showed on Wednesday, as they consumed crude released from stockpiles and alternative supplies.

After the U.S.-Israeli war with Iran started in late February, Japan, usually reliant on the Gulf for around 95% of its ​oil imports, switched to crudes originating from the U.S., the Caspian region, and Latin America and ​bought a cargo of non-sanctioned Russian oil.

From March 16, the government has also ⁠made available oil from its stockpiles equal to about 75 days’ worth of consumption to soften the ​blow from the supply shortage due to the largely closed Strait of Hormuz. This is Japan’s biggest ​oil release ever.
As a result, utilisation rates at Japanese refineries climbed to 77.3% of designed capacity in the week to May 2 and were at 73.3% of capacity in the week to May 9, the PAJ data showed, ​up from below 70% seen through April. The PAJ released two weeks’ worth of data because of ​the Golden Week holidays last week.
Idemitsu Kosan (5019.T), opens new tab and Cosmo Energy Holdings (5021.T), opens new tab, Japan’s second- and third-largest refining companies, respectively, said ‌this ⁠week they were sourcing oil from the Gulf that bypasses the Strait of Hormuz, among other places, and aimed for refinery utilisation rates of over 90% this fiscal year.

Idemitsu Kosan said on Tuesday it expects Hormuz to reopen for navigation somewhere between July and September, with benchmark Dubai oil prices declining to ​pre-war levels by the ​end of the next ⁠fiscal year ending in March 2027.
Cosmo Energy expects Gulf crude oil production to normalise in August with procurement stabilising from September onwards, it said on ​Tuesday.
On Wednesday, oil prices remained above $100 per barrel as investors continue pricing ​in Middle ⁠East supply disruptions from the war.
LNG STOCKS UP
Because Japan only buys about 6% of its LNG imports from supplies that must transit the Strait of Hormuz, there has been less impact from the war on ⁠its ​gas buying.
LNG stockpiles held by major Japanese utilities slightly increased ​to 2.12 million metric tons as of May 10 from 2.07 million tons a week before, according to the industry ministry, ​but remained below year-ago levels.