Japan establishes high-level dialogue with Opec to address energy security concerns

Senior officials from both sides will meet several times a year, Nikkei reports

Liquefied natural gas storage tanks at a thermal power station east of Tokyo. Reuters

Japan, the world's fourth biggest importer of crude, and Opec have agreed to establish dialogue between senior officials to address Tokyo's energy security concerns.

Kei Takagi, Japan's Parliamentary Vice Minister for Foreign Affairs, met Opec secretary general Haitham Al Ghais in Vienna on Tuesday.

They discussed global energy supplies and the outlook for demand, the Nikkei reported on Wednesday.

In future talks, senior officials from both sides will meet several times a year in alternating visits, the business daily said.

Japan is looking to bolster its energy security by entering into long-term liquefied natural gas agreements and adding more renewable resources to its overall energy mix.

Global competition for LNG cargo is set to intensify this year as China’s economy recovers and Europe stockpiles more natural gas before the next winter.

In December, Inpex, Japan’s largest oil and gas exploration company, signed an agreement with US-based Venture Global LNG for the supply of a million tonnes annually for the next 20 years.

Last year, Saudi Arabia and Japan signed new agreements focused on the circular carbon economy and carbon recycling fields and covering other areas such as green hydrogen, fuel ammonia and derivatives.

The talks between Japan and the oil producer's group come at a time when crude prices are trading below $80 a barrel amid growing concerns over the fuel demand outlook.

Brent, the benchmark for two thirds of the world’s oil, has lost about 13 per cent of its value since the beginning of the year.

On June 4, top crude exporter Saudi Arabia announced a unilateral production cut of a million barrels per day for July and said that an extension could be possible.

The Opec+ group of 23 oil-producing countries has extended its current production cuts until the end of 2024.

The alliance has total production curbs of 3.66 million bpd, or about 3.7 per cent of global demand, in place, including a 2 million bpd reduction agreed on last year and voluntary cuts of 1.66 million bpd announced in April.

On Tuesday, Opec again raised its 2023 oil demand growth forecast for top crude importer China and said the recent economic slowdown in the country could persist until the middle of the year.

The group also maintained its global oil demand growth forecast of 2.3 million bpd for this year.

The Group of Seven most developed nations met in Japan last month and affirmed their goal of a highly decarbonised road sector by 2030 and net zero emissions on roads by 2050.

The group said it was aiming for 100 per cent or a vast majority sales of zero emission vehicles in the light duty class by 2035.