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Ministry: Japan's Reliance on Middle East Oil Rose to 95.1% in 2023

Oil storage tanks in Japan. (Reuters)
Oil storage tanks in Japan. (Reuters)
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Ministry: Japan's Reliance on Middle East Oil Rose to 95.1% in 2023

Oil storage tanks in Japan. (Reuters)
Oil storage tanks in Japan. (Reuters)

Japan's reliance on crude oil supplied from the Middle East has increased by one percentage point to 95.1% last year, data released by the Ministry of Economy, Trade and Industry showed on Wednesday.

Japan imported 147.7 million kiloliters of oil last year (2.5 million barrels per day), down 7% from a year before, with the share of Saudi Arabia and the UAE rising to 40.4% and 39% from 38.1% and 37.9%, respectively.

Share of oil imports from Russia fell further to just 0.1% of total crude oil imports by Japan, down from 1.3% in 2022 and 4% in 2021, a year before Moscow invaded Ukraine, triggering Western sanctions.

Oil prices settled lower on Wednesday, pressured by low economic activity in leading crude importer China.

Brent crude futures for March, which expire on Wednesday, settled down 87 cents, or about 1.1%, to $82 a barrel, while the more actively traded April contract settled down 80 cents, or about 1%, at $81.70.

West Texas Intermediate crude for March delivery fell 82 cents, or 1.1%, to $77 a barrel on the New York Mercantile Exchange.

Manufacturing activity in China, the world's second-largest economy, contracted for a fourth straight month in January, an official factory survey showed on Wednesday.

"The factory data confirms our view that China, at least for now, is an impediment to global oil demand growth," said Tamas Varga of oil broker PVM.

Meanwhile, the Israel-Hamas war has widened the conflict in the Red Sea between the United States and Iran-aligned Houthi militants.

But while that has disrupted oil and natural gas tanker shipping, which is driving up delivery costs and starting to affect oil supplies, a Reuters poll suggested that record production in the West and slow economic growth will keep a lid on prices and limit any geopolitical risk premium.

Russian Deputy Prime Minister Alexander Novak said that current oil prices adequately reflect the current market situation, while global oil demand is widely seen rising by around 2 million barrels per day.

He declined to elaborate more just a day before leading ministers from the Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, will meet online.

The panel, named the Joint Ministerial Monitoring Committee, can call for a full OPEC+ meeting or make recommendations on policy.

OPEC+ will likely decide its oil production levels for April and beyond in the coming weeks, OPEC+ sources said, adding that a meeting of a key ministerial panel next Thursday would take place too early to take decisions on further output policy.

"The market requires silence; any words somehow affect the market. I want to say that the current (oil) price on the market adequately reflects the current situation," Novak told reporters.

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Business

Mawani Updates MSC’s 'JADE' Service Route via Bab Al-Mandab, Suez Canal

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Mawani Updates MSC’s 'JADE' Service Route via Bab Al-Mandab, Suez Canal

The Saudi Ports Authority (Mawani) announced an update to the route of MSC’s JADE shipping service, which will now transit the Bab Al-Mandab Strait and the Suez Canal, passing through King Abdullah Port in Rabigh, the Saudi Press Agency reported on Sunday.

The update will help reduce cargo transit times and enhance trade efficiency and the reliability of supply chains to and from the Kingdom of Saudi Arabia.

The JADE shipping service connects King Abdullah Port with several regional and international ports. These include Fos-sur-Mer in France; Barcelona and Valencia in Spain; Gioia Tauro in Italy; Singapore; Nansha, Yantian, Xiamen, Ningbo, Shanghai, and Qingdao in China; and Busan in South Korea. The service has a capacity of up to 15,000 TEUs.

Updating the service route via the Bab Al-Mandab Strait and the Suez Canal shortens the shipping route, speeds up the delivery of goods and commodities to markets, and improves the efficiency of export and import flows. This supports the smooth operation of supply chains and strengthens the Kingdom’s position as a major hub in the global trade and maritime network.

The route update reflects the readiness and operational capabilities of Saudi ports, as well as their strategic location along major maritime trade routes. It strengthens Saudi Arabia’s connectivity with global markets and supports the objectives of the National Transport and Logistics Strategy to establish the Kingdom as a global logistics hub connecting three continents.

Business

Chinese Factory Slump Eases, but Weak Services Signal Uneven Recovery

Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)
Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)
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Chinese Factory Slump Eases, but Weak Services Signal Uneven Recovery

Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)
Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)

China's factory activity improved in August on stronger demand but remained in contraction, while services activity stayed weak, underscoring deepening imbalances in the economy and fueling calls for policy measures to boost the economy.

The divergence between manufacturing and service sectors suggests that China will continue to rely on manufacturing and exports to drive growth as momentum remains under pressure from lackluster domestic consumption and investment.

The official manufacturing purchasing managers' index (PMI) picked up to 49.8 from 49.2 in July, remaining below the 50-mark separating growth from contraction, a survey by the National Bureau of Statistics showed on Monday. It beat the median forecast of 49.6 in a Reuters poll.

NBS data showed both demand and output improved in August, with sub-indexes ‌for new orders ‌and production returning to expansion territory above 50.

TOO EARLY TO PREDICT ECONOMIC ‌RECOVERY

"Domestic ⁠demand seems to ⁠be coming back, although it's more likely to have been driven by AI and exports than by policy expansion," said Xu Tianchen, senior economist at the Economist Intelligence Unit.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said it was too early to conclude the economy had rebounded.

The non-manufacturing purchasing managers' index (PMI), which covers services and construction, remained unchanged at 49.0, matching July's reading, the weakest since December 2022.

"Because China's services sector is primarily domestically focused, this suggests domestic demand remained relatively sluggish in August," Lynn Song, ING's Greater China chief economist, said in a note. "For ⁠now, the PMI data suggests that we are due for another month of ‌relatively sluggish domestic activity data in August, with any potential rebound ‌likely to be limited."

The August PMIs for equipment manufacturing and high-tech manufacturing both came in above 51, while consumer goods ‌and high-energy-consuming industries stayed in contraction, according to data released by the NBS.

Zhang Liqun, an analyst with the ‌China Federation of Logistics & Purchasing, said that with the manufacturing PMI reading still in contraction, business confidence remained unstable.

"Continued government investment in public goods should be strengthened to effectively drive increased orders for businesses, continuously consolidate and enhance business confidence, and further strengthen factors contributing to economic stabilization and recovery."

SIGNS OF PREVAILING WEAKNESS

Economic data released earlier this month showed that growth remained under ‌pressure at the start of the second half, with goods consumption and industrial output both slowing.

Fixed-asset investment extended declines and the property market is still ⁠struggling to find a ⁠bottom more than five years into a slump.

Exports remained a growth driver, helped by robust demand for AI-related shipments that lifted prices for Chinese-made high-tech goods, but the profit squeeze felt by manufacturers relying on domestic demand weighed on overall industrial profits.

China's top leaders pledged in late July to introduce additional policies to support the economy as growth slowed to a more-than-three-year low of 4.3% in the second quarter, and vowed to accelerate fiscal spending on already-budgeted infrastructure projects for the remainder of the year.

The finance ministry recently expanded loan interest subsidies for small private firms and consumers to spur demand, while the central bank said this month it would roll out measures without signaling explicit cuts to policy rates or banks' reserve-requirement ratio.

ING's Song said the positive impact from interest subsidies "may be relatively marginal," and expects more measures in the weeks ahead.

In a sign the government will not unveil large-scale stimulus, an article published this month in the People's Daily, the Communist Party's official newspaper, said China is not excessively reliant on strong policy stimulus and that it is capable of achieving its annual economic growth target.

Business

Gold Hits Near Two-Week Low on Fed Chief’s Hawkish Stance

Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)
Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)
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Gold Hits Near Two-Week Low on Fed Chief’s Hawkish Stance

Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)
Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)

Gold fell on Monday to its lowest in nearly two weeks after US Federal Reserve Chair Kevin Warsh signaled that interest rate hikes may be needed to ease price pressures, while escalating Middle East tensions fueled inflation fears.

Spot gold fell 0.8% to $4,417.04 per ounce by 0406 GMT, hitting its weakest level since August 19. Prices dropped more than 3% on Friday.

US gold futures declined ‌1.4% to $4,466.80.

"Gold is ‌still licking its wounds after the hawkish ‌tone struck ⁠by Warsh at ⁠Jackson Hole. US military action in Iran has put upward pressure on oil prices, and this has added to gold’s woes from an inflation standpoint," said Tim Waterer, chief market analyst at KCM Trade.

Though viewed as a hedge against inflation, gold typically loses appeal in a rising interest rate environment as it does not yield ⁠interest.

The Fed will "have work to do" if policymakers ‌don't get the confidence they need ‌that inflation is heading down to 2%, Warsh said on Friday at ‌the Jackson Hole economic symposium, coming closer than he has to ‌acknowledging rate hikes may be needed.

Markets currently see a 60% chance of a Fed rate hike in September, according to the CME FedWatch tool.

Iran's energy hub of Kharg Island is being blown to smithereens, US ‌President Donald Trump said on social media, after forces hit two rocket launchers on another island ⁠in the first ⁠known American strikes on Iran since late July. Oil prices were up more than 2%.

A series of US labor market reports is due this week, including job openings, the ADP employment report, weekly jobless claims and nonfarm payrolls data.

"NFP has the potential to either extend gold’s post-Jackson Hole softness or provide the catalyst for a short-covering bounce," Waterer said.

Spot silver fell 0.4% to $66.10, platinum declined 1.3% to $1,797.03 and palladium slipped 2.5% to $1,386.96.

BMI said silver prices were likely to stay near current levels, supported by steady investment demand and constrained mine supply, while easing physical tightness and softer demand would limit further gains.