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(Bloomberg) — Several Japanese power producers have withheld full-year earnings guidance due to uncertainty around the supply and cost of liquefied natural gas.
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The war in the Middle East has driven a 70% increase in Asian LNG prices, while the Strait of Hormuz — a key chokepoint for energy supplies from the region — remains effectively closed to shipping nearly nine weeks into the conflict. The world’s biggest LNG plant in Qatar was also damaged by missile attacks last month.
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Citing this uncertainty, Okinawa Electric Power Co., which provides power to Japan’s southern islands, did not provide guidance for the fiscal year ending March 2027 when it published prior-year earnings on Thursday. Chubu Electric Power Co., the utility that covers the nation’s industrial heartland, also withheld guidance in an announcement earlier this week.
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In recent years, Japan has cut dependence on the Middle East for its LNG to the point where Qatar and the United Arab Emirates combined accounted for about 6% of total supplies in 2025, compared with 25% a year earlier, according to ship-tracking data from analytics firm Kpler.
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Utilities, however, remain exposed to the cost of importing fuel. Many power producers secure LNG on long-term contracts, which are linked to oil prices that have surged since the conflict began. Importers must also, on occasion, secure spot cargoes, which have also become much more expensive.
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The rising LNG costs are expected to “weigh heavily” on earnings at all Japanese utilities in the second quarter of the financial year, which runs from July to September, SMBC Nikko Securities Inc. analyst Koji Kamichika wrote in a note dated April 22.
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These costs could get passed to Japanese consumers in the summer, when utilities typically adjust their rates based on a system that uses the average import cost of oil, gas and coal.
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All 10 of Japan’s major regional utilities are releasing full-year earnings this week.
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In a sign that a resumption of combat operations in the Middle East is under consideration, US Central Command’s Admiral Brad Cooper will meet President Donald Trump on Thursday for discussions, according to an Axios report, which cited two unnamed people.
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