EU ban forces S&P to block credit ratings for Russian firms

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TOKYO: Japan’s biggest refiner, Eneos Holdings Inc., has stopped buying crude oil from Russia in response to Moscow’s invasion of Ukraine, Chairman Tsutomu Sugimori said on Tuesday.

Eneos will continue to receive supplies until around April based on contracts signed before Russia launched its invasion on Feb. 24, with no issues on financial settlement and shipment, Sugimori told a news conference.

“But no contracts have been signed since the invasion and we have no plan to import Russian crude for the time being,” he said, adding he expected alternatives to be procured from the Middle East.

Sugimori, also the head of the Petroleum Association of Japan, said additional sanctions by the West on Russian oil would boost global oil prices.

“Unless major oil producers with extra output capacity, such as Saudi Arabia or United Arab Emirates, step up production… and if sanctions on Russia widen, oil prices will climb further,” he said.

Oil prices stayed well above $110 a barrel on Tuesday as some European Union members discussed a potential oil embargo on Russia.

Elevated prices have already dented gasoline demand in Japan, Sugimori said, pointing to a 12 percent drop in Eneos’ gasoline sales in February against the same month in pre-pandemic 2019.

“The COVID-19 pandemic has also slowed demand, but stronger oil prices have caused consumers to buy less gasoline,” he said.

Eneos shut its Sendai and Chiba refineries after a magnitude 7.3 earthquake jolted Japan’s northeast coast off Fukushima last week. read more

“The Chiba plant’s shutdown was due to a blackout, but we hope to have it back on as soon as possible as power is restored,” Sugimori said.

“The Sendai refinery had leaks in some equipment, but we hope to repair them and resume operation as soon as possible,” he said.

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