Japan’s Idemitsu to slash refinery capacity due to shrinking oil demand

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Oil refiner Idemitsu Kosan plans to cut its capacity by 13% in less than two years as the ageing and shrinking population in Japan and the global shift to greener energy eats into household demand for petroleum, it said on Tuesday.

“Domestic demand for petroleum products is declining faster than expected because of the population’s ageing and shrinkage, as well as the worldwide trend for decarbonisation,” Idemitsu Executive Vice President Susumu Nibuya told a news conference.

Idemitsu will terminate refining refining operation at Seibu Oil’s Yamaguchi plant in western Japan by March 2024, the company said. Idemitsu holds a 66.9% stake in Seibu Oil.

The 120,000 bpd plant represents about 13% of Idemitsu’s domestic capacity.

Idemitsu plans to make Seibu Oil a wholly owned subsidiary as soon as possible to set about restructuring, Nibuya said.