Japan’s largest oil refiner, Eneos Corp, has reported an unplanned shutdown of its No. 3 crude distillation unit (CDU) at the Kawasaki refinery, located near Tokyo. The unit, which processes 77,000 barrels per day, was taken offline on June 4. No timeline has been announced for its restart.
Though the disruption may seem small by global standards, it adds to growing concerns about the fragility of Japan’s refining sector. This latest incident follows other recent setbacks for Eneos. A CDU in Mizushima was only just restarted after scheduled maintenance, while another unit in Sakai remains out of operation until July.
These repeated outages are underscoring deeper issues. Japan’s oil demand is in long-term decline due to an aging, shrinking population and shifting energy policies that prioritize low-carbon alternatives. At the same time, Japanese refiners face growing competition from newer, more efficient plants in Asia and the Middle East.
In this context, even short-term outages can have an outsized impact. Japan relies heavily on imports, with over 80% of its crude oil coming from Saudi Arabia, the UAE, and other Middle Eastern suppliers. As Japan’s import volumes continue to fall, the country’s supply chain is becoming more concentrated—and more vulnerable to sudden disruptions.
While refinery utilization typically dips in the second quarter, the bigger concern is long-term. Data from Vortexa shows that crude arrivals into Japan in 2024 are already near the bottom of a nine-year range. Meanwhile, Japanese exports are under pressure from U.S. trade policies and slower Chinese demand, giving refiners little reason to ramp up output after maintenance ends.
For global crude exporters, especially those looking to Asia as a key market amid falling demand in the West, Japan’s declining role should serve as a warning. The region’s traditional demand centers are changing, and with them, the economic logic of refining.