What Scheme Could Allow Kazakhstan to Supply Oil to Japan, Expert Explains

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Japan is considering importing oil from Kazakhstan, but direct supplies seem unlikely due to complex logistics, Orda.kz reports.

Earlier it became known that Japan is studying the possibility of increasing oil imports from Central Asia and other regions against the backdrop of risks to supplies through the Strait of Hormuz. This was reported by Nikkei Asia. The focus is on oil from projects in which the Japanese company INPEX holds a stake.

Oil and gas expert Olzhas Baidildinov noted that it is most likely not about the physical transportation of oil, but about alternative arrangements. The Japanese company INPEX has a stake in the Kashagan project, but the volumes that might be discussed remain limited.

This oil goes through the CPC to the Black Sea. To get to Japan, you would have to go around a huge part of the world. It's long, expensive and not entirely safe under current conditions. he said. 

According to him, so‑called swap deliveries — exchange schemes actively used in the market — appear to be a more realistic option.

More likely, we are talking about such schemes: oil is supplied, for example, to the Black Sea or Turkey, and in return the company receives volumes in Asia. Such mechanisms are often used, but remain commercial information. the expert explained. 

The expert added that supplies would not be stable and could depend on the infrastructure situation, including the operation of the Caspian Pipeline Consortium. In his opinion, interest in such options is linked to problems in the Asian oil market and the search for alternative routes.

There are currently issues with oil supplies in Asia, so even seemingly exotic options like this are being considered. the expert added. 

Original author: Alina Elgeldina

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