The Japan oil and gas downstream market size was valued at USD 178.70 Billion in 2025. The industry is expected to grow at a CAGR of 2.20% during the forecast period of 2026-2035 to reach a valuation of USD 222.14 Billion by 2035.
The Japan oil and gas downstream market plays a vital role in supporting the country’s energy security and industrial operations. The sector encompasses refining, marketing, and distribution of petroleum products, and it remains essential despite Japan's long-term shift toward renewable energy. As one of the largest importers of crude oil, Japan relies heavily on its downstream infrastructure to process and distribute refined fuels such as gasoline, diesel, kerosene, and petrochemical feedstocks. The market is driven by the country’s refined product demand, strict energy efficiency policies, and advancements in refining technology. Government initiatives promoting decarbonization and energy diversification are prompting investments in cleaner fuel technologies, including hydrogen and synthetic fuels.
As of May 2025, Japan’s downstream sector is undergoing gradual structural changes. Major players are consolidating operations and upgrading refineries to meet new environmental standards and improve operational efficiency. ENEOS Holdings, the country’s largest oil refiner, is transitioning part of its production to focus on biofuels and hydrogen, aligning with Japan’s carbon neutrality goals for 2050. Meanwhile, demand for jet fuel has rebounded post-pandemic, driving short-term growth in certain segments. The integration of digital tools in refinery operations and distribution logistics is further enhancing supply chain transparency and efficiency across Japan’s energy landscape, thereby supporting the Japan oil and gas downstream market growth.
Base Year
Historical Period
Forecast Period
Compound Annual Growth Rate
2.2%
Value in USD Billion
2026-2035
*this image is indicative*
| Japan Oil and Gas Downstream Market Report Summary |
Description |
Value |
|
Base Year |
USD Billion |
2025 |
|
Historical Period |
USD Billion |
2019-2025 |
|
Forecast Period |
USD Billion |
2026-2035 |
|
Market Size 2025 |
USD Billion |
178.70 |
|
Market Size 2035 |
USD Billion |
222.14 |
|
CAGR 2019-2025 |
Percentage |
XX% |
|
CAGR 2026-2035 |
Percentage |
2.20% |
|
CAGR 2026-2035 - Market by Type |
Petrochemical |
2.4% |
|
CAGR 2026-2035 - Market by End User |
Industrial |
2.6% |
Environmental concerns are leading Japanese LNG importers to focus on reducing methane emissions across the supply chain, there by impacting the demand of the Japan oil and gas downstream market. Under the leadership of Hiroyuki Mori, the Coalition for LNG Emission Abatement Toward Net Zero (CLEAN) was formed, comprising major Japanese LNG buyers like Mitsubishi Corp. and Mitsui & Co. The coalition aims to document and reduce methane emissions, enhancing the sustainability of LNG as a transitional fuel.
Japanese LNG buyers are reevaluating their supply sources in response to global market shifts. JERA, Japan's largest LNG buyer, has expressed concerns over Australia's competitiveness compared to emerging U.S. suppliers, citing issues like approval delays and policy uncertainties in Australia. This reassessment may lead to a diversification of LNG supply sources to ensure stable and cost-effective imports.
Japan's ageing population and declining domestic demand for petroleum products are driving refiners to consolidate operations and enhance efficiency, suupporting the Japan oil and gas downstream market development. In March 2025, ENEOS announced that it plans to gradually cease production of lubricants and certain petroleum products at its Yokohama plant by March 2028, aiming to streamline its production system. This move is part of a broader strategy to adapt to structural changes in the domestic market and maintain competitiveness.
Japanese refiners are recalibrating their energy strategies to prioritize liquefied natural gas (LNG) and sustainable aviation fuel (SAF). LNG is viewed as a practical transitional fuel due to its lower carbon emissions compared to coal and oil, while SAF is gaining traction as the aviation industry faces growing regulatory and consumer scrutiny over emissions. In May 2025, ENEOS announced that it plans to raise its refinery utilisation rate from 78% in 2024 to 90% by fiscal 2027, indicating renewed confidence in conventional infrastructure aligned with cleaner output targets.
The Expert Market Research’s report titled “Japan Oil and Gas Downstream Market Report and Forecast 2026-2035” offers a detailed analysis of the market based on the following segments:
Breakup by Type
Key Insight: As pe the Japan oil and gas downstream market analysis, the refining segment is evolving in response to changing energy consumption patterns and environmental regulations. While domestic demand for traditional fuels is gradually declining, refiners are optimizing operations to enhance efficiency and reduce emissions. Companies like ENEOS are investing in refinery upgrades to increase output of cleaner fuels such as low-sulfur diesel and sustainable aviation fuel (SAF). The government’s push for energy security amid global supply uncertainties is encouraging stable crude imports and higher refinery utilization rates.
Breakup by End User
Key Insight: Japan’s commercial sector is experiencing growth in oil and gas downstream consumption, particularly in hospitality, retail, and food service industries. High energy demands for space heating, cooking, and hot water systems continue to drive the use of LPG and other refined products. Moreover, energy diversification policies are encouraging commercial buildings to integrate backup systems using LPG or gas-based solutions for emergencies. Localized microgrid initiatives in commercial zones are further boosting downstream demand by combining gas with smart energy management systems.
Petrochemical Growth Strengthens Japan’s Downstream Energy Landscape
As per the Japan oil and gas downstream market report, the petrochemical segment is gaining momentum due to steady demand for plastics, fertilizers, and industrial chemicals used across automotive, packaging, and electronics industries. The country’s advanced manufacturing base drives consistent domestic consumption, while export demand across Asia supports production growth. Companies are integrating petrochemical operations with refining to maximize margins and feedstock efficiency.
|
CAGR 2026-2035 - Market by |
End User |
| Industrial |
2.6% |
| Commercial |
XX% |
| Residential |
XX% |
Fuel Security and Heating Needs Boosts Japan’s Residential Market
The residential segment in Japan oil and gas downstream market is witnessing steady growth due to continued reliance on liquefied petroleum gas (LPG) and kerosene for heating, especially in rural and colder regions. Additionally, disaster preparedness policies emphasize energy security at the household level, supporting stable demand for portable fuel sources like LPG. Ongoing subsidies and technological upgrades in domestic gas appliances are also contributing to efficiency gains and encouraging continued use of petroleum-based products in residential areas. Furthermore, Japan has set ambitious targets to source 40-50% of its electricity from renewable energy by fiscal year 2040, alongside 20% from nuclear power. This is part of a draft revision of its basic energy policy aimed at reducing reliance on fossil fuels and meeting rising energy demands.
Key players in Japan oil and gas downstream market are focusing on optimizing refinery operations, reducing excess capacity, and improving energy efficiency. They are aligning with government policies on decarbonization by reallocating investments toward cleaner fuels and upgrading existing infrastructure. Strategic efforts also include enhancing supply chain resilience, improving operational safety, and adopting digital tools to streamline logistics and monitor refinery performance in real time. In response to shifting domestic demand and global energy trends, companies are restructuring their product portfolios and strengthening their presence in emerging low-carbon segments. There is an increasing emphasis on regional collaboration, feedstock diversification, and integration of alternative fuels like biofuels and LNG. These firms are also working to meet stricter emissions regulations while ensuring stable fuel supply for industrial, commercial, and residential use across Japan.
Based in Tokyo, Aramco Asia Japan is a wholly owned subsidiary of Saudi Aramco. It supports Aramco’s operations in Japan through crude oil sales, marketing, and business development. The company plays a strategic role in maintaining long-term energy partnerships between Saudi Arabia and Japan, while also exploring innovation and sustainability initiatives in downstream and petrochemical sectors.
Headquartered in Tokyo, Mitsui & Co. is a major Japanese conglomerate with diversified investments in energy, chemicals, infrastructure, and logistics. In the oil and gas downstream sector, it is involved in trading, refining, and the development of LNG and alternative energy projects. Mitsui is advancing sustainability through global partnerships and investments in low-carbon technologies.
TotalEnergies SE, headquartered in Courbevoie, France, operates across the entire energy value chain including refining and petrochemicals. In Japan, the company is active through fuel marketing and LNG supply partnerships. It supports the country’s downstream energy needs while promoting cleaner fuels and contributing to regional decarbonization goals through advanced fuel and carbon reduction technologies.
Headquartered in Tokyo, JAPEX is a key player in Japan’s energy sector, engaged in the exploration, production, and supply of oil and natural gas. It operates both domestically and internationally, supporting Japan’s energy security through upstream projects and LNG import infrastructure, while also pursuing carbon neutrality goals through CCS and renewable energy investments.
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Other key players in the Japan oil and gas downstream market are Shell International B.V., BP plc, Chiyoda Corporation, Sumitomo Chemical Co., Ltd., and others.
Download a free sample of our Japan oil and gas downstream market trends report for detailed insights into regional demand, key players, and fuel supply strategies. Stay ahead with expert analysis on infrastructure shifts, energy transition priorities, and refining developments shaping Japan’s downstream energy future. Make informed decisions with data you can trust from Expert Market Research
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*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*
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In 2025, the market reached an approximate value of USD 178.70 Billion.
The market is projected to grow at a CAGR of 2.20% between 2026 and 2035.
Key strategies include strict energy efficiency policies, advancements in refining technology, government initiatives, and declining domestic demand for petroleum products.
The major players in the market are Japan Petroleum Exploration Co., Ltd. (JAPEX), Aramco Asia Japan K.K., Mitsui & Co., Ltd., TotalEnergies SE, Shell International B.V., BP plc, Chiyoda Corporation, Sumitomo Chemical Co., Ltd., and others.
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
| REPORT FEATURES | DETAILS |
| Base Year | 2025 |
| Historical Period | 2019-2025 |
| Forecast Period | 2026-2035 |
| Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
|
| Breakup by Type |
|
| Breakup by End User |
|
| Market Dynamics |
|
| Competitive Landscape |
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| Companies Covered |
|
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