Japan cabinet backs plan to help oil importers pay higher transport costs
USO•Japan’s cabinet approved three bills to strengthen energy supply security, including grants to offset higher transport costs for oil and fuel imports using routes that avoid chokepoints such as the Strait of Hormuz.
1. Three bills approved
The cabinet approved bills covering fuel procurement diversification, transport insurance support and changes to the law governing the Japan Organization for Metals and Energy Security. The government plans to submit them to parliament during the current extraordinary session.
2. Alternative supply routes
The grant programme would compensate importers for higher transport costs when sourcing crude oil and fuels through alternative routes, and would be funded by contributions from oil refiners, traders and petrochemical manufacturers. The insurance measure would let the government cover part of payouts for tankers and other vessels carrying petroleum products and liquefied natural gas if foreign reinsurers cannot provide coverage because of heightened geopolitical tensions. Proposed changes would also let JOGMEC invest in infrastructure, including pipelines, to secure alternative supply routes.
3. Import dependence
Japan sourced 94% of its crude oil imports from the Middle East in 2025, and 93% of those shipments passed through the Strait of Hormuz. Industry Minister Ryosei Akazawa said crude oil procurement for October was expected to reach about 100% of the average monthly supply in 2025.
