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Japan’s Refining Capacity Still Crippled

Refining margins are up 53% since Thursday. Of Japan’s 4.3m b/d of capacity, Morgan Stanley is suggesting just 1.4m b/d is offline. Moreover, because of the extensive damage to the refineries at JX and Cosmo, supply is likely to remain offline for an extended period of time.

At the present, due to Japan’s nuclear power plants turning the Northeast corridor of its country into a wasteland, they will need to import at least 317b b/d of oil and 2.1bcm of gas. They will use said fossil fuels to restart their thermal power plants, now idle at 26% capacity (oil) and 57% (gas). In order to afford their citizens with electricity, and other such luxuries, they will likely bring capacity up to 70% and 65%, respectively.

Hence the need for foreign oil.

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