TOKYO - Japan’s oil supply is facing what experts describe as the largest crisis in its history, as global competition for energy intensifies following the attack on Iran, triggering widespread disruptions across logistics networks and medical services.
One month has passed since the United States and Israel launched attacks on Iran, with concerns growing over the impact on global energy supplies as reports emerge of further large-scale military operations being prepared, while analysts tracking shipping movements indicate that oil tankers bound for Japan are effectively stranded, leaving supply routes severely constrained.
In Japan, the crisis is already rippling through key industries, with three major transport associations gathering at the headquarters of the Liberal Democratic Party to call for urgent measures to address surging fuel costs, warning that the situation has escalated beyond what the industry can manage alone.
Rising fuel prices have pushed logistics firms to the brink, with companies such as Yanagawa Unyu in Fukuoka Prefecture reporting that fuel accounts for roughly 40% of operating costs, creating a situation where the more trucks operate, the greater the financial losses become, as even a 20-yen increase per liter translates into millions of yen in additional monthly expenses.
The situation has worsened further with suppliers beginning to halt deliveries, particularly to companies with private fueling facilities, leaving firms scrambling to secure limited fuel shipments through negotiations, often receiving less than requested, raising fears not only of high prices but of complete shortages.
Logistics operators warn that distribution functions as a form of “oxygen” for the economy, largely unnoticed until disrupted, with concerns mounting that if transportation falters, agricultural products such as Fukuoka-grown strawberries will fail to reach major markets like Tokyo, threatening both producers’ livelihoods and consumer supply chains.
The crisis is also hitting the healthcare sector, where many essential medical tools, including syringes, IV lines, and gloves, are made from petroleum-based materials, forcing clinics to absorb rising costs that cannot be passed on to patients under Japan’s fixed medical fee system, while inventory shortages begin to emerge.
Doctors warn that shortages of disposable medical supplies could have life-threatening consequences, particularly in treatments such as dialysis, which relies heavily on plastic-based equipment and is administered multiple times per week to more than 330,000 patients nationwide, with no viable alternatives available.
The impact is being felt globally, with long lines forming at gas stations in the Philippines ahead of price hikes, prompting President Ferdinand Marcos Jr. to declare a national energy emergency, while South Korea has introduced vehicle usage restrictions based on license plate numbers for visitors to public institutions and is urging households to conserve energy.
Amid the global scramble, India has pursued a distinct strategy, deploying naval escorts for tankers passing through the Strait of Hormuz and leveraging diplomatic negotiations with Iran, including humanitarian assistance to Iranian naval personnel, to secure continued energy shipments, particularly liquefied petroleum gas essential for daily life.
India has also expanded imports of Russian crude oil, doubling daily volumes in March compared to February, capitalizing on relaxed sanctions and a surplus of available supply, while South Korea is reportedly considering similar moves despite potential diplomatic risks tied to international sanctions.
Japan, however, faces more complex constraints due to its position within the Group of Seven, having committed to restrictions on Russian oil imports, limiting its flexibility compared to non-G7 countries, while efforts to source oil from routes that bypass the Strait of Hormuz are expected to cover only a fraction of demand.
To stabilize domestic supply, the government has begun releasing approximately 8.5 million kiloliters of oil from national reserves—equivalent to about one month of domestic consumption—from 11 storage bases nationwide, while also raising gasoline subsidies to a record 48.1 yen per liter, helping bring the national average price down to 177.7 yen as of March 25th, marking the first decline in six weeks.
Kazutani Ichiro, a senior researcher at the Institute of Energy Economics, Japan, said: "As long as subsidies continue, prices are likely to remain in the 170-yen range. The key question is whether government funding can be sustained."
According to the Ministry of Economy, Trade and Industry, Japan’s total oil reserves stood at the equivalent of 239 days of supply as of March 23rd, including 146 days of national reserves, 87 days of private reserves, and 6 days of jointly held reserves with oil-producing nations, but experts warn that this does not guarantee long-term security.
Kazutani said: "It is essential to secure alternative import sources before reserves are depleted."
Japan relies on the Middle East for more than 90% of its crude oil imports, but with the Strait of Hormuz effectively blocked, attention has turned to alternative suppliers such as the United States, Saudi Arabia, Russia, Canada, and other producers, although no single country can fully replace Middle Eastern supply.
Even when alternative sources are secured, logistical challenges remain, with shipments from Alaska taking around 12 days, from the southern United States approximately 55 days, and from Ecuador about 27 days, compared with roughly 21 to 23 days from the Middle East, adding both time delays and higher transportation costs.
Kazutani said: "Importing from more distant countries inevitably raises shipping costs, meaning higher overall prices."
Experts estimate that even with alternative procurement, Japan may only secure about half of its required oil supply in the coming months, leaving the remainder dependent on stockpiles and conservation measures, underscoring the severity of what is increasingly viewed as an unprecedented supply crisis.
Kazutani added that energy conservation measures may soon become unavoidable: "That timing will likely come. If restrictions are introduced early, reserves can be stretched longer, which is desirable from the perspective of stable supply."
Unlike past oil shocks driven primarily by price surges, the current situation is characterized by actual supply disruptions, raising the risk of prolonged shortages that could severely impact economic activity and daily life, with specialists warning that continued conflict could trigger widespread global economic instability.
Source: TBS
