Japan needs to diversify its oil sources, but the head of the industry association indicates that Canadian supply may be challenging.

Written by Emily J. Thompson, Senior Investment Analyst

Source: Reuters

Updated: Sep 18 2025

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Source: Reuters

Japanese Oil Import Dependency: Japan relies heavily on the Middle East for crude oil, with 95% of its imports coming from that region, prompting calls for diversification of supply sources.
Alberta's Investment Proposal: Alberta is exploring a financial investment in Japan's refining sector to reduce its dependence on the U.S. for oil exports, potentially involving a joint venture to build a coker unit for processing heavy crude from Alberta's oil sands.
Challenges of Canadian Oil: The head of the Petroleum Association of Japan, Shunichi Kito, noted that while diversification is necessary, importing Canadian oil may be difficult due to its heavy characteristics.
Domestic Oil Demand Decline: Kito expressed skepticism about investing in new refining facilities due to a projected annual decline of about 2% in domestic oil demand, emphasizing that decisions will be made by individual companies.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.