TOKYO -- Cosmo Energy Holdings will become the first Japanese company to import U.S. oil since Washington dismantled its 40-year ban on exports late last year.
The company will spend around 1 billion yen ($8.47 million) procuring the crude, which includes shale oil from the Eagle Ford development in Texas. The oil will be shipped to Japan in mid-February, and Cosmo will refine around 300,000 barrels at locations in Chiba and Mie prefectures in the middle of April.
Japanese oil wholesalers use about 3.9 million barrels of crude per day to produce gasoline, gas oil and other products. They currently import oil mostly from Middle Eastern countries such as Saudi Arabia, though shipments of African and South American crude have been on the rise.
The current diplomatic rift between Saudi Arabia and Iran underscores the political instability in the region, prompting wholesalers to look to the U.S. and elsewhere as additional suppliers. In addition, the price of West Texas Intermediate crude tends to be lower than the other two international benchmarks, Dubai and Brent crude.
Oil prices have sunk to roughly $30 per barrel, fueled in part by lower demand from China, which is in the midst of an economic slowdown. With Iran, which is emerging from sanctions, and the U.S. returning fully to the international market, supplies may become further saturated.