While falling in line with other OPEC nations that are making oil production cuts, Saudi Arabia is making sure that some of their more important customers are assured that their supplies won’t see any dip. One of those countries is Japan, which has to rely on imports from around the world due to limited options on their land.
Saudi Arabia happens to be the largest supplier for Japan, with an approximate total of 1.13 million barrels headed there on a daily basis. The accounts for one-third of their entire imports over the course of a year.
Markets that the Saudi have cut when it comes to production include the United States, Europe and India. North Asian countries, including Japan, have largely been spared being part of the strategic move to reduce supply in order to stimulate the price of oil, which remains half of what it was in mid-2014.
When it comes to the collective consumption of individual markets, Japan ranks third in the world, behind the United States and the needs of China. The Japanese also have been receiving a combined total of close to 1.4 million barrels per day from the Middle East through the United Arab Emirates, Qatar and Kuwait. All told, Middle Eastern countries account for 87 percent of their supply channels.
In recent years, Japan has become much more dependent on Saudi oil. During most of 2015 and the early portion of last year, the Japanese increased their level of imports by nearly 25 percent.
That growing bond is one reason why Mohammed bin Salman, the Saudi Deputy Crown Prince, and Khalid al-Falih, the Kingdom’s Energy Minister visited Japan last September. King Salman himself is considering a March visit, which would be the first time that a Saudi king had visited since 1971.