Japan expects oil import levels to recover in July economy

Japanese Prime Minister Sanae Takaishi said that her country expects to restore its crude oil imports to levels before the outbreak of the Iran war next July, benefiting from expanding its supplier network and diversifying sources of supplies away from the region.

Takaishi explained, during a special government meeting on Thursday, that Japan will be able next month to secure the same amount of crude oil imports that it obtained during the same period last year, despite the turmoil that struck global energy markets.

She said that Japan was dependent on the Middle East for more than 90% of its oil imports, but over the past years it has worked to diversify its supply chains and reduce dependence on one source.

She added: “The United States expanded its exports 10-fold, and we were also able to communicate with other oil producers.”

She pointed out that Tokyo has increased its imports from several regions around the world, saying: “In addition to the United States, from which shipments arrived from Alaska last week, imports were secured from Latin America, the Asia-Pacific region, Central Asia, and Africa, as well as Canada recently.”

The Japanese Prime Minister revealed a new step in this path, explaining that “crude oil shipments are scheduled to arrive from Mexico for the first time in July,” and added: “We are making progress in diversifying the sources of our crude oil supplies.”

Widespread disturbances

Takaishi’s statements come at a time when global markets are facing widespread turmoil following Iran’s closure of the Strait of Hormuz in response to US and Israeli strikes, which has raised concerns about energy flows from the Gulf region.

The disruption of shipping traffic through the Strait has put pressure on Asian energy-importing countries, particularly Japan, which relies heavily on imported oil and gas to meet its domestic needs.

Takaishi said that the shortage of oil supplies and related products posed a challenge to the Japanese economy during the recent period, but efforts to diversify sources helped limit the impact of the crisis.

The Japanese Prime Minister announced that she will travel to Europe at the end of the week to participate in the Group of 7 meetings scheduled to be held in France.

She added that she intends to discuss the energy security issue with European leaders, explaining that she will raise the issue as a “representative of Asia”, in light of growing global fears of the repercussions of geopolitical tensions on oil and gas markets.