BEIJING (Reuters) - Japan’s demand for oil and gas will increase as it rebuilds from its devastating earthquake, but this will not have a significant impact on global markets, Saudi Aramco CEO Khalid al-Falih told Reuters on Sunday.
The head of Saudi Arabia’s state oil giant said that Japan would be able to meet its energy needs through a combination of domestic industry and regional producers.
Japan has been struggling with power shortages in the aftermath of its earthquake and tsunami. In the longer term, there are questions about whether its nuclear crisis will lead it to back away from atomic power and rely more on alternatives such as natural gas.
“There will be short-term disruptions to the markets in Japan. There are obviously logistical disruptions and some of the refineries will not be producing, but it will be made up from inventory supply,” Falih said on the sidelines of a forum in Beijing.
He said that Japan’s reconstruction would probably drive its economy to grow at a faster clip.
“In the medium term, there is actually going to be a slightly larger demand for crude oil and refined products and gas within Japan as a result of increased activity,” Falih said.
“Whatever disruptions will be met by Japanese industry and regional producers, without a significant impact on global supply and demand balances of crude or products,” he said.
Japan’s neighbors pledged to ramp up liquefied natural gas exports to the quake-stricken nation on Friday, helping the world’s third-biggest economy to replace the power supply crippled by the disaster.
Japan’s earthquake has caused the loss of around 9,700 megawatts (MW) of nuclear and 10,831 MW of thermal power generation, leaving millions without electricity in the midst of wintry weather.