Risk of fluctuations in crude oil prices and procurement

「The Dubai crude oil price remained at a high level after rising from the low-$108-per-barrel range at the beginning of the period amid heightened tensions in the Middle East. It subsequently fell sharply to the low-$63 range at one point against the backdrop of the entry into force of a memorandum on the cessation of hostilities between the United States and Iran and expectations of a US interest-rate hike. It then rose again amid concerns about supply stemming from stalled peace negotiations between the United States and Iran and an expansion of attacks in the Red Sea and Gulf regions, ending the interim consolidated accounting period in the low-$106 range.」

「Tensions in the Middle East escalated and the Strait of Hormuz was blockaded. Even under these business conditions, the company continues to ensure a stable supply of energy by taking agile measures in its Oil Business and Petrochemicals Business.」

「原油価格（ドバイ原油）は、期初１バレル75ドル台から、ＯＰＥＣプラスの増産決定及び世界景気悪化懸念等を背景に下落しました。その後、中東の地政学リスクや米国の対ロシア制裁の動き等により一時上昇しましたが、ＯＰＥＣプラスの増産継続や米中貿易摩擦への懸念、世界的な石油需給の緩和観測等により下落基調で推移しました。当連結会計年度末には、中東情勢の緊迫化及びイランによるホルムズ海峡の封鎖を受けて大幅に上昇し、121ドル台となりました。」

「Crude oil prices, including Dubai crude, temporarily fell to the $59 range from the $75 range per barrel at the beginning of the period, against a backdrop of OPEC+'s decision to increase production and concerns about a deterioration in the global economy. Prices then rose in response to escalating tensions in the Middle East and moves by the United States to impose sanctions on Russia, but expectations of increased OPEC+ production pushed prices lower, and Dubai crude was in the $69 range at the end of the interim consolidated accounting period.」

「Crude oil prices, including Dubai crude, temporarily rose from the $87 range per barrel at the beginning of the period amid concerns about geopolitical risks in the Middle East. However, the announcement by OPEC+ of a policy to gradually reduce the scale of its production cuts and concerns about slowing oil demand in the United States and China pushed prices lower, and Dubai crude was in the $73 range at the end of the interim consolidated accounting period.」

「Crude oil prices, including Dubai crude, initially rose from the $84 range per barrel at the beginning of the period as OPEC+ maintained coordinated production cuts and Saudi Arabia and Russia implemented voluntary crude oil supply reductions, despite being weighed down by interest rate hike decisions in the United States and Europe and stagnation in the Chinese economy. Prices subsequently declined amid expectations that OPEC+ would not strengthen its coordinated production cuts and that the scale of voluntary cuts would remain limited, and Dubai crude was in the $77 range at the end of the third quarter of the fiscal year.」

「Oil prices initially declined as Dubai crude, which was in the $84 range per barrel at the beginning of the period, was weighed down by interest rate hike decisions in the United States and Europe and stagnation in the Chinese economy. Prices then rose as OPEC+ maintained coordinated production cuts and Saudi Arabia and Russia announced voluntary crude oil supply reductions, and Dubai crude was in the $96 range at the end of the second quarter of the fiscal year.」

「Oil prices generally declined as Dubai crude, which was in the $84 range per barrel at the beginning of the period, was weighed down by interest rate hike decisions in the United States and Europe and stagnation in the Chinese economy. Prices temporarily rose following the extension of OPEC+'s existing production-cut framework, but moved within a limited range amid concerns about an economic slowdown caused by continued monetary tightening and other factors, and Dubai crude was in the $76 range at the end of the first quarter of the fiscal year.」

「The Group measures the sensitivity of fluctuations in crude oil prices to its consolidated earnings forecast for the following period. A US$1 change in the price of Dubai crude per barrel could cause annual segment profit in the Oil Business to increase or decrease by ¥2.2 billion.」

「Oil prices rose moderately as Dubai crude, which was in the $101 range per barrel at the beginning of the period, was pushed higher by economic sanctions against Russia and other factors. Prices subsequently entered a downtrend amid concerns about a global recession, driven by continued monetary tightening following interest rate hikes in the United States and Europe, among other factors, and Dubai crude was in the $78 range at the end of the third quarter of the fiscal year.」

「Oil prices rose moderately as Dubai crude, which was in the $101 range per barrel at the beginning of the period, was pushed higher by economic sanctions against Russia and other factors. Prices subsequently entered a downtrend amid concerns about a global recession, driven by monetary tightening following interest rate hikes in the United States and Europe, among other factors, and Dubai crude was in the $89 range at the end of the second quarter of the fiscal year.」

「Oil prices generally rose moderately as Dubai crude, which was in the $101 range per barrel at the beginning of the period, was pushed higher by the worsening situation in Ukraine and Europe's decision to ban imports of Russian crude oil, despite concerns that oil demand would slow due to monetary tightening from interest rate hikes in the United States and Europe and lockdowns in Chinese cities. Dubai crude was in the $113 range at the end of the first quarter of the fiscal year.」

「The recent sharp fluctuations in crude oil prices caused by escalating tensions in Ukraine, the outbreak of war and political instability in areas surrounding Middle Eastern oil-producing countries, terrorism, and other unforeseen events could affect crude oil procurement and impact the operating results and financial position of the Group. The Group measures the sensitivity of fluctuations in crude oil prices to its consolidated earnings forecast for the following period. A US$1 change in the price of Dubai crude per barrel could cause annual segment profit in the Oil Business to increase or decrease by ¥1.7 billion.」

「Oil prices generally rose as Dubai crude, which was in the $61 range per barrel at the beginning of the period, benefited from increased oil demand accompanying the normalization of economic activity, while supply constraints remained, including the lack of progress toward an agreement by OPEC+ on further reductions in production cuts. Dubai crude was in the $75 range at the end of the second quarter of the fiscal year.」

「Oil prices generally rose as Dubai crude, which was in the $61 range per barrel at the beginning of the period, benefited from expectations that the economic recovery would gain momentum as COVID-19 vaccinations progressed. However, upside was limited by uncertainties including developments in nuclear agreement negotiations between the United States and Iran and the spread of COVID-19 variants, and Dubai crude was in the $72 range at the end of the first quarter of the fiscal year.」

「Oil prices generally declined initially as Dubai crude, which was in the $23 range per barrel at the beginning of the period, was affected by concerns about a global economic downturn and declining crude oil demand as COVID-19 spread. Prices subsequently rose as resource demand recovered following the reopening of economies and the dollar weakened in the foreign exchange market. After leveling off for some time, prices recovered to the $51 range at the end of the third quarter of the fiscal year, supported by heightened expectations of a recovery in demand following the start of COVID-19 vaccinations in Europe and the United States, among other factors.」

「Oil prices generally declined initially as Dubai crude, which was in the $23 range per barrel at the beginning of the period, was affected by concerns about a global economic downturn and declining crude oil demand as COVID-19 spread. Prices subsequently rose as resource demand recovered following the reopening of economies and the dollar weakened in the foreign exchange market. Although prices began to level off due to the resurgence of COVID-19 and a pause in the economic recovery, downside risk was limited, and Dubai crude was in the $40 range at the end of the second quarter of the fiscal year.」

「Oil prices generally declined as Dubai crude, which was in the $23 range per barrel at the beginning of the period, was affected by concerns about a global economic downturn and declining crude oil demand as COVID-19 spread. Prices rose following the reopening of economies in various countries, supported by expectations of a recovery in crude oil demand and OPEC+'s decision to extend coordinated production cuts, and Dubai crude was in the $42 range at the end of the first quarter of the fiscal year.」

「Oil prices fluctuated within a range from the latter half of the $50s to the first half of the $70s as Dubai crude, which was in the upper-$60s per barrel at the beginning of the period, was affected by heightened uncertainty over the outlook for the global economy arising from U.S.-China trade friction, attacks on oil-related facilities in Saudi Arabia, and the easing of concerns about an economic slowdown and declining crude oil demand following progress in U.S.-China trade talks. Prices then plunged after OPEC member and non-member countries failed to reach an agreement on coordinated production cuts in March, compounded by the expanding impact of COVID-19 on economic activity, and ended the period in the $23 range.」

「Oil prices declined as Dubai crude, which was in the mid-$67s per barrel at the beginning of the period, was weighed down by heightened uncertainty over the outlook for the global economy arising from tensions between the United States and China, among other factors. Prices then surged temporarily following attacks on oil-related facilities in Saudi Arabia in September. They subsequently declined as concerns about tightening crude oil supplies eased, and Dubai crude was in the $60 range at the end of the second quarter of the fiscal year.」

「Oil prices rose as supply concerns arising from coordinated production cuts by OPEC and others, as well as production declines associated with U.S. economic sanctions against Iran and Venezuela, supported Dubai crude, which was in the mid-$67s per barrel at the beginning of the period. Prices subsequently declined amid heightened uncertainty over the outlook for the global economy due to tensions between the United States and China, among other factors, and Dubai crude was in the mid-$64s at the end of the first quarter of the fiscal year.」

「Oil prices rose through early autumn as Dubai crude, which was in the mid-$65s per barrel at the beginning of the period, was driven higher by uncertainty, including concerns about tightening supply and demand amid reduced Iranian crude supply following sanctions imposed on Iran by the Trump administration in the United States. However, prices plunged following the partial exemption from the sanctions on Iran, and Dubai crude was in the $52 range at the end of the third quarter of the fiscal year.」

「Dubai crude, which was in the $65-per-barrel range at the beginning of the period, temporarily softened due to expectations of increased U.S. shale oil production and speculation that coordinated production cuts would be eased at the OPEC meeting in June. It then rose amid uncertainty resulting from requests by the Trump administration in the United States for countries to stop importing Iranian crude oil, ending the second quarter in the $80-per-barrel range.」

「Dubai crude, which was in the $65-per-barrel range at the beginning of the period, temporarily softened due to expectations of increased U.S. shale oil production and speculation that coordinated production cuts would be eased at the OPEC meeting in June. It then rose due to requests by the Trump administration in the United States for countries to stop importing Iranian crude oil, ending the first quarter in the $75-per-barrel range.」

「Dubai crude, which was in the $51-per-barrel range at the beginning of the period, declined to the $43-per-barrel range due to factors including increased U.S. shale oil production, but ended the period in the $65-per-barrel range following the November agreement by OPEC to extend production cuts and demonstrations against the Iranian government.」

「Dubai crude, which was in the $51-per-barrel range at the beginning of the period, declined due to increased U.S. shale oil production and disappointment with the terms of the agreement to extend coordinated OPEC production cuts in May. However, amid expectations from September onward that the crude oil market was moving toward supply-demand equilibrium, and following the decision in November to extend coordinated production cuts led by OPEC, it ended the third quarter in the $64-per-barrel range.」

「Dubai crude, which was in the $51-per-barrel range at the beginning of the period, declined due to increased U.S. shale oil production and disappointment with the terms of the agreement to extend coordinated OPEC production cuts in May. However, it rose from September onward amid expectations that the crude oil market was moving toward supply-demand equilibrium, ending the second quarter in the $55-per-barrel range.」

「Dubai crude, which was in the $51-per-barrel range at the beginning of the period, declined due to increased U.S. shale oil production and disappointment with the terms of the agreement to extend coordinated OPEC production cuts in May, ending the first quarter in the $46-per-barrel range.」

「Crude oil prices are heavily influenced by demand and production trends. Demand is significantly affected by the United States, a major consumer, and rapidly growing Asian economies, particularly China. Production is significantly affected by changes in production by OPEC members and other oil-producing countries, as well as changes in shale oil production.」

「Dubai crude, which was in the $34-per-barrel range at the beginning of the period, rose on growing expectations that excess supply would be eliminated following the agreement in December between OPEC and non-OPEC members to coordinate production cuts, reaching the $53-per-barrel range at the end of the third quarter.」

「Dubai crude, which was in the $34-per-barrel range at the beginning of the period, declined amid heightened uncertainty related to the UK's Brexit issue, but rose due to heightened geopolitical risks in the Middle East and the agreement to cut production reached at the OPEC meeting in September, ending the second quarter in the $45-per-barrel range.」

「Dubai crude, which was in the $34-per-barrel range at the beginning of the period, rose due to heightened geopolitical risks in the Middle East, the U.S. Energy Information Administration's outlook for declining U.S. shale oil production, and a decline in U.S. crude oil inventories, reaching the $46-per-barrel range at the end of the first quarter.」

「In addition to the risk that crude oil prices and procurement may be adversely affected by political instability caused by the outbreak of war or other factors and by unforeseen events such as terrorism, operating stoppages at production sites and other events may affect operating results and financial condition.」