Could Takaichi’s Optimism Be Risky? Japan Faces Growing Concerns Over Naphtha Supply

The True Nature of the Magic Material Naphtha

Tensions in the Middle East involving Israel, Iran, and others show no sign of easing. Rising crude oil prices and supply concerns seem unavoidable, and every day the news warns of further blows to gasoline prices and the cost of living. But why is it that this thick, black liquid can be transformed into so many different forms and used so extensively?

“Because all of the chemical industry begins with naphtha.”

That is according to Professor Masahiko Matsukata of the School of Advanced Science and Engineering at Waseda University.

When crude oil is transported to a refinery, it is first heated in a distillation tower. Crude oil contains various components with different boiling temperatures (boiling points), and these differences allow it to be separated into LPG gas, naphtha, diesel fractions (the primary raw material for diesel fuel), and other products.

As each component reaches its boiling point, it changes into a gas. The component with the lowest boiling point is LPG gas, followed by light naphtha, which boils between 30°C and 140°C; heavy naphtha, which boils between 40°C and 230°C; kerosene fractions, which boil between 170°C and 250°C; diesel fractions, which boil between 240°C and 350°C; heavy oil fractions, which boil above 350°C; and finally residual oil.

Heavy naphtha is used to produce high-quality gasoline, while light naphtha is used in chemical products.

“Naphtha contains hundreds of different kinds of molecules. When it is thermally cracked, it becomes chemical feedstocks such as ethylene and propylene. These are basic chemicals, and all chemical products are created from them.

Naphtha is used so widely because every branch of the chemical industry starts with it. Coal and steel drove the Industrial Revolution, but oil is what has built civilization since World War II. Naphtha is the most important substance in creating modern civilization.” (Professor Matsukata, hereafter the same)

Three new resources that could replace oil

When you think about it, it wasn’t all that long ago that plastic products became so widespread. Before that, drinking water came in glass bottles, and plastic shopping bags didn’t exist.

“Chemical products only began to be mass-produced after the transition from the age of coal to the age of oil. That was after the 1960s. Naphtha came into use because it allowed the production of inexpensive, high-performance materials.”

Even so, is it really okay to depend so heavily on oil? Is there nothing that can replace naphtha?

“There are only three ways anywhere in the world to make chemical products without using petroleum. One is biomass—using organic matter such as plants and animals as raw materials. Another is making effective use of waste as a resource. The third is capturing CO₂ and using it as a chemical feedstock.

It is extremely important to make chemical products from these three sources so that we can avoid using petroleum, and all of them are being researched. Even so, it probably won’t be until the 2050s or later that we can truly do without petroleum.”

Professor Matsukata is also researching methods of producing chemicals by recycling waste plastics. What are the prospects for practical application?

“What we’re researching is the recycling of polypropylene and polyethylene, which account for 70% of all plastics. According to 2024 data, Japan’s total estimated waste plastic output was 9.11 million tons.

Of that, 70%—about 6.3 million tons—is polypropylene and polyethylene. Recycling used polypropylene and polyethylene is still in the research and development stage, so the amount being recycled is probably less than 100,000 tons per year.

We’re still very much at the toddling stage.”

Energy technologies that utilize biomass and CO₂ are also still in the research phase, and practical implementation is expected to take considerable time.

A crisis approaching Japan, which depends on the Middle East for 90% of its oil

Naphtha is used in plastic bags, PET bottles, cosmetics, medical equipment, clothing, detergents, and even semiconductors. Since only about 10% of crude oil becomes naphtha, the crude oil Japan imports alone is not enough, so additional naphtha is imported separately to make up the shortfall.

What would happen if the Strait of Hormuz were closed and oil stopped reaching Japan?

“It would be disastrous. First, transportation would come to a halt. In Europe, airlines have already begun reducing flights, and the same could happen in Japan. Southeast Asia is already facing serious situations due to gasoline shortages.

Prime Minister Takaichi says Japan will be fine, but if parts manufactured in Southeast Asia stop arriving, Japanese industry will also grind to a halt.

Fuel shortages could stop logistics, preventing imports of food, fertilizer, and other essential goods. On top of that, naphtha—the raw material for food packaging and agricultural supplies—would also run out.

If naphtha stops coming in, we won’t be able to manufacture virtually anything.”

What should be done?

“For now, we have no choice but to leave it to the government. However, even if the current Middle East crisis subsides, another one could occur. To avoid situations like this, Japan needs to diversify its sources of crude oil.”

At present, Japan relies on the Middle East for more than 90% of its crude oil imports.

“After the 1973 oil shock, Japan expanded its procurement sources to countries such as Malaysia, Indonesia, and Brazil.

But in the end, Middle Eastern oil proved easier to use, and eventually more than 90% of imports came to depend on the Middle East.”

The composition of crude oil differs depending on where it is produced.

“Middle Eastern crude contains a large amount of kerosene fractions that boil between 170°C and 250°C, making it particularly suitable for Japan, which uses large quantities of kerosene.”

According to Professor Matsukata, crude oil from Venezuela contains a high proportion of heavy oil fractions and is thick like coal tar. Using it in Japan would require expensive investments in refining equipment and infrastructure.

He also notes that even if society eventually becomes capable of functioning without petroleum, products are unlikely to be manufactured as cheaply as they are today using petroleum-based raw materials, meaning prices would probably rise.

“Energy derived from biomass and similar sources may involve a certain degree of cost increase. Rather than simply accepting that burden in the form of higher prices, I believe society as a whole must share it fairly and build a new social system that does not depend on fossil resources.”

Even after the current Middle East crisis passes, many challenges are likely to remain.

Masahiko Matsukata — Professor in the Department of Applied Chemistry, School of Advanced Science and Engineering, Waseda University. He conducts research on developing catalysts that enable new chemical reactions to help solve energy and environmental problems, as well as membrane separation technologies aimed at dramatically reducing energy consumption in chemical processes.