PanOrient News | Libyan Turmoil Worries Japan about Oil Supplies

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Libyan Turmoil Worries Japan about Oil Supplies

Tuesday, February 22, 2011

TOKYO - (PanOrient News) Japanese leaders expressed concern about the impact of political turmoil in Libya and the Middle East on Japan's economy and its crude oil supplies. They also “hoped” that a peaceful and democratic solution to the crisis in Libya is reached.

While confirming there has been no problem so far in Japan's crude oil imports from the Middle East because the situation in major suppliers such as Saudi Arabia and United Arab Emirates is relatively stable, some Japanese ministers said the unrest in Libya may have substantial impacts on Japan and could become the biggest economic risk.

Arabic reports and accounts coming out from Libya said thousands of civilians were killed or injured there as the government of Libyan Leader Muammar Gaddafi has deployed fighter jets and African mercenaries to open fire on pro-democracy protesters in a number of cities.

This caused Japanese leaders to worry about possible spread of unrest to other parts of the Middle East, the main source of about 90 percent of total Japanese crude oil imports. But Libyan share of Japanese oil imports is zero, according to the Ministry of Economy, Trade and Industry.

Analysts in Tokyo told Japanese media that escalating demonstrations in Libya are starting to affect oil shipments to Europe, adding that crude oil prices in London may rise further. They also said that the turmoil in Libya could spread to neighboring oil-producing countries.

Japanese Prime Minister Naoto Kan, meanwhile, said on Tuesday that a peaceful and democratic solution to the crisis in Libya is desirable. Mr. Kan called on the Libyan authorities to exercise restraint in coping with the situation that let to a high number of casualties there.

Japanese Chief Cabinet Secretary Yukio Edano said at a press conference ''it is extremely regrettable that violence has been used on the protesters in Libya and there were casualties. '' He called on “both the protestors and the government would deal with the situation in a peaceful manner.'' "Stability in the Middle East is important for Japan, and we hope our oil supply will be safeguarded," Edano added.

Crude oil prices surged in the morning on a Middle Eastern crude market in Tokyo, with the benchmark July delivery crude marking 55,000 yen per liter, the highest since October 2008.

A meeting was held today to discuss the developments in Libya and its impact on the Middle East and Japan. It was attended by relevant ministers only, including Prime Minister Naoto Kan, Finance Minister Yoshihiko Noda, Economic and Fiscal Policy Minister Kaoru Yosano and Economy, Trade and Industry Minister Banri Kaieda, among others.

Arabic TV networks have showed military units patrolling the streets of the Libyan capital, Tripoli.

This situation has prompted Japanese companies to evacuate their employees from the country. JX Nippon Oil & Gas Exploration Corporation, a subsidiary of JX Holdings Inc., has reportedly arranged to evacuate the head of its Tripoli office and his family members from Libya on Tuesday. Inpex Corp. has ordered its six Japanese employees to prepare to evacuate and told their families to leave the country immediately.

Trading firms are also pulling their employees out, Japanese daily Nihon Keizai Shimbun reported. Mitsui & Co. has told its Libyan office head to leave the country as soon as possible.

Photo: Embattled Libyan ruler Muammar Gaddafi has made a 40-second appearance on the country's state-run television, saying that he is in capital Tripoli “not in Venezuela.”

PanOrient News