Despite a significant drop in the volume of Oman's oil exports to Japan this year, the value of the sultanate's total exports to the Far East nation rose by 12 per cent to US$3.75bn in the first nine months of this year mainly due to higher oil prices, increased liquified natural gas (LNG) and non-oil exports.
However, the value of Oman's imports from Japan fell 14.4 per cent to US$2.04bn during the same period, according to a report by Japan External Trade Organization (JETRO).
JETRO said that following the earthquake and tsunami, shortage of domestic goods forced Japan to drastically raise imports of chemicals and foodstuff, while Japan's exports of automobile, transport and electric equipments declined sharply. "The slowdown in production of materials and components led to a fall in intermediate and finished-product exports. Automobiles and integrated-circuit products largely contributed to the drop in exports.
"Although export volumes dropped sharply following the earthquake, the subsequent speed of the recovery of the supply chain exceeded expectations and the extent of the decline has shown rapid improvement," JETRO said. Apart from crude oil, Oman exports LNG, fish products, fruits, vegetables and other non-oil goods to Japan.
At the regional level, total exports by the six GCC countries to Japan surged by nearly 40 per cent to US$104bn in the nine-month period, while Japan's exports to GCC declined to around US$14bn from US$15bn last year, the JETRO figures show.
Jarmo Kotilaine, chief economist with NCB Capital in Riyadh, said Japanese trade numbers this year must be viewed in the context of the March earthquake and tsunami and the disruptions caused to economic activity. "In order to overcome the energy shortfall caused by the Fukushima nuclear power incident, Japan has been importing more LNG from Qatar, which is now emerging as the third-largest LNG exporter to Japan. Japan is the world's largest importer of LNG. The nuclear power shortfall was expected to increase Japanese LNG demand this year up by more than 10mn tonnes."
Echoing these views, Dr Brian Buckley, chief executive of Oman LNG, said Oman sent two additional LNG shipments to Japan this year in order to assist the calamity-hit country. "The earthquake and tsunami affected many refineries and a nuclear facility in Japan and because of that the demand for other fuels including natural gas has gone up this year. Japan is sourcing natural gas from many parts of the world including the Gulf.
"We have a long term commitment for only 36 shipments to Japan each year, but this year the government sent two additional shipments as relief to that country."
© Muscat Daily 2011
