Definition
“JCC” is the acronym of Japanese Crude Cocktail or more formally Japan Customs-cleared Crude.
This Japanese Crude Cocktail results from a basket of the most traded crude oils to be used as the reference price for long-term supply LNG Contracts.
Japan created the JCC Contracts after the first oil shock, in the early 1970s, to secure its first LNG contract sourced primarely from Indonesia at that time.
Comments
The Petroleum Association of Japan is calculating this Japan Customs-cleared Crude index formerly from the average of the top twenty crude oils by volume.
This is the raw and crude oil import prices in yen per kilolitre, the dollar yen exchange rate and the total Japanese imports of all commodities for the month
JCC is published every month in customs statistics.
Then South Korea and Taiwan had decided to use the same JCC index for their own long term LNG Contracts.
Until the mid-1990s, LNG demand was heavily concentrated in Japan, South Korea and Taiwan.
At the same time, Pacific Basin supplies dominated world LNG trade as the first energy source to be used in electric power generation.
Still today the JCC Contracts explain the reason why in the Northeast Asia region the LNG prices are closely indexed on the crude oil prices.
