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23 May 2024

Daily Newsletter

Saudi Crown Prince reassures Japan that oil supply will remain stable 

Saudi Arabia’s Crown Prince Mohammed bin Salman and Japan’s Prime Minister Fumio Kishida discussed oil supply and clean energy collaboration in a video conference on Tuesday.

Smruthi Nadig

Saudi Arabia’s Crown Prince Mohammed bin Salman assured Japan’s Prime Minister Fumio Kishida during a video conference on Tuesday that stable oil supplies to Japan will be maintained, the Japanese foreign minister said in a press release

The prince unexpectedly delayed his trip to Japan, planned for 20–23 May, due to King Salman's health issue. The crown prince was supposed to meet with Kishida and Japanese Emperor Naruhito during his visit. 

During the video conference, Kishida said he expects Saudi Arabia to continue stabilising the global oil market through further production increases. 

The Saudi Prince said: “Saudi Arabia remains committed to the stable supply of crude oil to Japan and would like to cooperate with Japan in other areas, including clean energy.” 

Kishida also mentioned his interest in collaborating to establish a global supply chain for clean energy such as hydrogen and ammonia. Additionally, he aims to promote cooperation in mineral resources by utilising Japanese technology under the Lighthouse Initiative, agreed upon between the two countries in July 2023. 

Considering economic diversification, Kishida said he hopes for direct investment from Saudi Arabia in various fields in Japan and collaboration in construction, power transmission, hydrogen utilisation, digital technology and other sectors to create business opportunities. He also mentioned his intent to finalise the Japan-GCC Free Trade Agreement (FTA), as negotiations will soon resume. 

The Prince stated that Saudi Arabia has sustained high economic growth and expressed his support for the resumption of Japan-GCC-FTA negotiations. He also welcomed cooperation with Japan in multiple areas beyond the energy sector. 

Reuters reports that Japan is the fourth-largest purchaser of oil globally and acquires 95% of its crude oil from the Middle East. This high dependency has significantly increased recently, setting Japan apart from other major oil importers. 

“Saudi Arabia holds a special position in the oil markets thanks to its spare production capacity, ranging from 1.5 to two million barrels per day (mbbl/d),” said Rami Khrais, an upstream analyst at GlobalData.  

In August, Japan imported 2.75mbbl/d, with Saudi Arabia (1.14mbbl/d) and the United Arab Emirates (1.12mbbl/d) as the largest suppliers and Kuwait contributing 200,000 barrels per day, Reuters said.  

The Crown Prince stated that: “Japan is also an outstanding country in the area of culture and that he seeks to strengthen cooperation with Japan in this area as well,” according to the statement.  

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