Japanese oil exploration company warns that the conflict in Iran may drag down profits and cause stock prices to plummet.

The stock price of Japan Petroleum Exploration Co., Ltd. fell by the maximum of 9.3%, marking the biggest drop since March 4. The company stated that the conflicts in the Middle East have led to cost increases and operational pauses, which may suppress the company's profits. The company announced last Friday that the impact of the current Iran conflict on its profits until the fiscal year ending in March 2026 is limited; however, due to temporary increase in purchasing liquefied natural gas spot, and the high probability of operating costs in the Gulf region rising, related risks will be included in the next fiscal year's performance forecast. Analyst Koji Kamichika of SMBC Nikko Securities estimated in a research report that, affected by the war, the cost of purchasing liquefied natural gas by Japan Petroleum Exploration Co. will increase by several billion yen. The company also highlighted risks: the supply and demand of chemical products required for domestic oil and gas field operations in Japan are tight, leading to upward pressure on operational costs.