Japan's Refining Crisis: A Death Knell for Middle Eastern Crude Demand?

Japan's refining sector is in freefall. Eneos' repeated outages—most recently at its 77,000-bpd Kawasaki unit—highlight a systemic collapse. Aging infrastructure, shrinking demand (driven by a 30%+ elderly population), and renewables policies are accelerating crude demand contraction. Middle Eastern exporters like Saudi Aramco () and ADNOC (), which supply 80% of Japan's oil, face stranded volumes.

Investment thesis: Short Middle Eastern crude-linked equities or ETFs (e.g., USO) as Japan's structural decline undermines Asia's crude demand narrative. The era of “ever-rising Asian consumption” is over—stranded assets and margin pressure are inevitable.

Action: Establish short positions in Saudi Aramco/ADNOC equities or energy ETFs now. The warning from Japan's refining crisis is a harbinger of Asia's energy transition.