Japan Fires Up Nukes, Oil Imports Drop

21 July 2004

Bloomberg. Japan’s crude-oil imports fell 12% in June as Tokyo Electric Power Co., Asia’s biggest power producer, restarted nuclear reactors, cutting demand for fuel used in power generation. However, even though the volume of imports fell 12%, the value of the crude oil imports in June rose 14% to ¥449.2 billion ($4.1 billion) due to the price increases. Japan imports 99% of its oil, more than 90% of that from the Middle East.

Crude oil imports by Japan, the world’s largest consumer of oil after the U.S. and China, fell to 17.3 million kiloliters (108.8 million barrels) in June from a year earlier, according to provisional data from the Ministry of Finance. Imports of fuel oil, burned along with crude oil to generate electricity, fell by about a third to 190,000 kiloliters.

Tokyo Electric, which supplies the nation’s capital and surrounding areas, has brought back on line 13 of a total 17 reactors it was forced by the government to close for inspections by April 2003 because employees were found to have falsified safety documents for a decade.

“The restart of nuclear reactors means there is less need for alternative fuels to generate electricity,” said Shun Maruyama, an economist at UFJ Institute Ltd. in Tokyo. “Refinery shutdowns also mean less oil is imported.”

Japan’s power companies operated the country’s 52 nuclear reactors at 75.7 percent of capacity in June, up from 46.9 percent a year earlier, the Federation of Electric Power Companies of Japan said last week.

As oil prices remain high, more trade-offs like this will be made.