Saudi Arabia lost its position as the largest crude oil supplier to Japan in August as relatively expensive heavy-end crude grades prompted refiners to seek lighter Abu Dhabi crudes during the trading cycle.
Reflecting the tight availability of heavy-end crude oil early in the third quarter because of OPEC output cuts, as well as sanctions on Iran and Venezuela, the official selling prices of heavy sour Saudi grades jumped to multi-year highs during early third quarter, incentivizing Japanese refiners to reduce Saudi oil imports sharply in August, S&P Global Platts reported.
Japan's crude imports from Saudi Arabia dropped 20.6% year on year to 922,824 barrels per day in August, led primarily by lower imports of Arab Medium crude, according to preliminary data released Monday by the Ministry of Economy, Trade and Industry.
Crude imports from the UAE, which regained the top supplier position in August, rose 9.9% year on year to 1.10 million bpd as Japan boosted imports of light sour Murban and Das crude.
Japan's intake of light sour Umm Lulu crude of about 1.48 million barrels in August, nearly triple July's 499,278 barrels, also helped boost imports of Abu Dhabi crude because there were no imports of the grade in August 2018.
Japan's Saudi crude imports may remain lower than a year earlier in the coming months in the wake of the Saudi oil facility attacks on September 14.