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Japanese, U.S. and U.K. banks provide Kuwait with $1 billion loan to cool oil market

TTO – Japan’s three major banks and major European and American banks jointly provided a $1 billion loan to help Kuwait increase oil production. The move is aimed at cooling the heating oil market caused by the Ukrainian war.

According to a report from Nikkei Asia on March 26, HSBC in the United Kingdom, Mizuho Bank, a subsidiary of JPMorgan Chase in the United States, Sumitomo Mitsui Banking Corporation, and Mitsubishi UFJ Bank provided large loans to Kuwait Oil Company.

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Mizuho Bank is expected to be the lead underwriter.

Early next week, Japanese Trade Minister Koichi Hagida will meet with Kuwait’s Oil Minister Mohammad Fares to sign the deal.

Disruptions to oil supplies due to the war in Ukraine and sanctions on Russia have been a major concern in the oil market in recent weeks, sending prices higher and many governments scrambling to find energy supplies. quantity. quantity. quantity. Substitute Russian supplies from other regions.

The loan was approved after Kuwait sought Japanese aid to boost its oil production capacity. The Japanese government backed the loan because it wanted to increase oil supplies in the Middle East.

Recently, Japan, the United States and Europe have called on oil-producing countries, especially those in the Middle East, to step up production. However, only a few countries, including Kuwait, have the capacity to increase capacity and production.

This latest loan deal could spur similar efforts to incentivize increased oil production by providing direct financial support.

Kuwait will provide 8.4 percent of Japan’s energy imports by 2021, according to Japan’s Energy Agency. Kuwait and two other Middle Eastern countries — Saudi Arabia and the United Arab Emirates — are three important oil suppliers to Japan.

Japan tried to expand purchases from Russia to reduce its dependence on the Middle East, but the war in Ukraine overturned that plan. Japan, a member of the Group of Seven (G7) nations, pledged to reduce its energy dependence on Russia in a joint statement on March 11.

Currently, finding alternative sources of crude oil has become a priority for Japan and other countries.

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