Japan has so far weathered the Middle East oil supply crisis remarkably well. But as the Iran war drags on with no durable resolution in sight, Tokyo is having to make some difficult choices and rethink how to secure its energy supplies.
The highly energy import-dependent country entered the war with an unusually stark combination of vulnerability and protection. A little over 80% of Japan’s crude oil imports passed through the Strait of Hormuz in the first two months of this year. The war in Iran has caused an unprecedented disruption.
But decades of preparing for such an emergency gave Japan an enormous cushion. At the end of 2025, it held oil reserves equivalent to 254 days of consumption: 146 days in government stocks, 101 days in mandatory commercial inventories and another 7 days under joint stockpiling arrangements with producing countries.
Those buffers worked. Even when Japan's crude imports collapsed by nearly two-thirds year on year in April to their lowest since 1962, the country avoided nationwide fuel shortages
The joint stocks are an especially useful layer of protection. Japan leases storage capacity to Saudi Aramco, Abu Dhabi National Oil Co and Kuwait Petroleum Corp, allowing them to use the facilities commercially in normal times while giving Japanese refiners preferential purchasing rights in an emergency. Together they held roughly 19.5 million barrels before the war, as per government data published in November 2025.
Japan drew heavily on its buffers early in the crisis. The government announced releases amounting to about 50 days of national stocks in March and April, alongside a 15-day reduction in the mandatory private-sector stockholding
Tokyo has since changed tack.
By June, Prime Minister Sanae Takaichi said Japan had secured enough alternative crude to restore July procurement to around 100% of year-earlier levels. Economy Minister Ryosei Akazawa subsequently said there would be no further national reserve releases in September or October.
More significantly, Japan is beginning to rebuild its buffer even before the crisis is over. Strategic reserves increased by 3 days of consumption in July, while the government has set a target of restoring national crude reserves to the equivalent of 90 days of net imports during fiscal 2026-27.
That is a prudent decision, but rebuilding is only one part of preparing for future prolonged supply shocks. The bigger challenge is how to reduce the vulnerabilities that made those emergency stocks necessary in the first place.
That means looking beyond national stockpiles towards the infrastructure, supply relationships and international partnerships that underpin energy security. These questions will be especially pertinent when energy producers, consumers and policymakers gather in Abu Dhabi for ADIPEC on November 2-5.
With this year's agenda focused on advancing global supply security and driving investments in the infrastructure that connects producers and consumers, the event will provide stakeholders in Asia with a useful forum for considering how the energy system can become more robust in the face of future disruption.
In Tokyo, this more complete strategy is taking hold.
In August, the government unveiled a package which included financial support through the Japan Organisation for Metals and Energy Security (JOGMEC) for Middle Eastern pipeline projects that bypass the Strait, as well as assistance with the additional transport costs incurred by Japanese companies. Tokyo is also considering a reinsurance mechanism to keep shipping operating when normal international cover becomes unavailable.
Helping Gulf producers expand their bypass capacity makes strategic sense for Japan. The UAE’s pipeline to Fujairah demonstrates how additional routes can provide greater flexibility when traditional supply corridors come under pressure. But resilience is also about creating deeper connections across the energy value chain.
Gulf producers have been expanding beyond their traditional role as crude suppliers for years, but recent disruptions are likely to accelerate investments in refining, trading and logistics and deepen their relationships with major consumer markets. ADNOC, for instance, has been strengthening the links between production, trading, refining and shipping, while reportedly exploring stakes in refineries operated by PTT units in Thailand and in Nigeria's Dangote refinery.
For Japan and other major Asian energy consumers, stronger links between producers and consumers, supported by investment in infrastructure and downstream capacity, can make energy flows more flexible and commercially connected while opening new opportunities for long-term cooperation.
The Americas are expected to provide significant incremental supply over the next couple of years. Based on the IEA's September forecasts, combined oil supply from Argentina, Brazil, Canada, Ecuador, Guyana, Mexico and the US is set to increase by around 2.5 million barrels per day in 2027, compared with 2025; this provides another valuable relief valve
However, put in perspective, the additional supply would replace only a fraction of the crude and condensate that normally flows through Hormuz.
Japan should expand sourcing from other regions, but geography remains an important factor. Middle Eastern producers possess the scale, crude quality and established commercial relationships that have made them Japan's dominant suppliers for decades. Diversification can reduce the concentration risk; it cannot eliminate Japan's dependence on Gulf oil.
Nor can any single alternative route provide a complete answer. The sensible response is an all-of-the-above strategy: maintain healthy inventories, diversify supply geographically, retain strong relationships with Gulf producers and help them build additional export routes that reduce dependence on Hormuz.
Vandana Hari is a global energy analyst and founder of Vandana Insights.
Source: Japan Today
