Japanese refiners ENEOS and Idemitsu Kosan have closed or plan to close refineries in response to declining petroleum consumption in Japan. The closures represent 7% of the country's refinery capacity and are driven by factors such as an aging and shrinking population, slow economic growth, and increased petroleum export competition in Asia. Japan's petroleum consumption is projected to decline to its lowest level since 1980 by 2024. The country's refineries struggle to compete in international markets due to their smaller size and lower complexity compared to newer refineries in Asia. Japan's declining refinery runs have also led to reduced crude oil imports, with the country relying heavily on imports from the Middle East.
Japan is experiencing a decline in petroleum consumption, leading to the closure of refineries. The country's petroleum consumption is forecasted to be the lowest since at least 1980 in 2024, partly due to its aging and declining population. Consumption of petroleum products in Japan is expected to decline by 3% between 2023 and 2024. The decline in consumption is attributed to demographic and economic changes, as well as a decrease in oil intensity. Japan's refineries, built to serve domestic fuel needs, struggle to compete in international markets due to their smaller size and complexity. The use of more expensive crude oils also makes Japanese refiners less profitable and less competitive. The closure of refineries is a result of these challenges. The decline in petroleum consumption in Japan is impacting the refining industry and is expected to continue in the coming years.
In addition to the decline in petroleum consumption in Japan, oil giant Shell has announced plans to close nearly 500 gas stations in the United States between 2024 and 2025 as part of its Energy Transition Strategy. The closures will only affect sites directly owned by Shell, which has over 13,000 stations in the US and 45,000 Shell-branded locations worldwide. The move is driven by Shell's goal to meet customer needs for electric vehicles and reduce carbon emissions by 20% in the next six years. The company aims to grow its public charging station network for electric vehicles and increase the distribution of low-carbon products. This decision by Shell reflects the broader trend of gas station closures in response to changing consumer demands and the transition to cleaner energy sources.
Shell, one of Michigan's biggest gas station chains, is closing over 1,000 stores nationwide as it shifts its focus to electric vehicles (EVs). The closure of these stores could potentially cause problems in Michigan, where EVs have yet to show much reliability in cooler temperatures. Shell currently has over 400 locations in Michigan, making it the state's third-largest gas station chain. The impact of these closures on those who have not transitioned to EVs could be significant. It is uncertain at this time if any locations in Michigan will be closed. [0151e0b1]