Japan Calls for Transition to Brent Pricing from Dubai Benchmark to Address Increasing Fuel Costs

Japan requests fuel wholesalers to adopt Brent pricing to mitigate gasoline price hikes caused by supply disruptions in the Middle East.

Japan’s industry ministry has requested that domestic fuel wholesalers transition from using Dubai crude pricing to Brent benchmarks for determining gasoline prices, as indicated in a document reviewed by Reuters.

The directive, released by the Ministry of Economy, Trade, and Industry, seeks to address increasing fuel costs as global energy markets continue to experience volatility due to disruptions associated with the Iran conflict.

Japan, dependent on the Middle East for over 90% of its oil imports, has implemented various strategies to address supply shocks and price pressures. The measures encompass a partial release of strategic oil reserves and the evaluation of intervention in crude oil futures markets to stabilize the yen.

The ministry chose not to provide any comments regarding the document.

The proposal suggests that wholesalers should maintain their pricing of gasoline based on Brent crude oil instead of the Dubai crude oil benchmark, given that Brent futures are presently trading approximately $100 per barrel lower than Dubai crude.