Rising tensions surrounding the closure of the Strait of Hormuz are beginning to ripple through Japan’s economy, with higher energy costs and shortages of petroleum-based materials threatening to accelerate inflation just as the country heads into another extremely hot summer.
Construction projects across Japan are being suspended as shortages of paint, thinner and waterproofing materials linked to worsening tensions in the Middle East place mounting pressure on small and midsize builders, with some contractors warning they may soon be forced out of business.
The crude oil tanker "Idemitsu Maru," which passed through the Strait of Hormuz, is scheduled to arrive at Nagoya Port around noon on May 25th, drawing attention as Japan faces a sharp decline in crude imports from the Middle East following the effective closure of the strategic waterway.
Japan’s imports of crude oil from the Middle East plunged 67.2% in April from a year earlier, as the impact of the effective closure of the Strait of Hormuz began to ripple through the country’s trade and energy supply chains.
TOTO, a major Japanese manufacturer of housing and bathroom equipment, reopened its showroom in London, England, on May 20th after undergoing its first major renovation in 16 years.
Uncertainty surrounding the situation in the Middle East is beginning to affect daily life in Japan, as concerns over crude oil supplies spread to restaurants, cleaning services and even household garbage disposal systems across the Kansai region.
As conflict in the Middle East drags on, shortages of naphtha — a key raw material used in a wide range of petroleum-based products — are beginning to affect even Japan's traditional cheap snacks, with manufacturers facing steep rises in packaging and material costs while trying to keep products affordable for children.
As the prolonged disruption of shipping through the Strait of Hormuz continues to strain global energy markets, differences are emerging between how Japan and South Korea are responding to the growing risk of fuel shortages and rising prices.