Japan to diversify crude supplies, back pipelines that bypass Hormuz

• Prime Minister Sanae Takaichi ordered the package to bolster Japan's energy resilience after the start of the Iran war and the effective closure of the strait highlighted the country's heavy reliance on Middle Eastern crude.
• Middle East imports accounted for 94% of Japan's crude oil in 2025, with 93% coming via the strait. No target was set for reducing dependence on Middle Eastern crude oil.
• Japan will cooperate with Middle Eastern oil-producing countries on pipeline projects to bypass the strait by providing financial support through the Japan Organization for Metals and Energy Security (JOGMEC).
• To diversify crude procurement, the government plans to introduce a levy-funded scheme under which refiners and traders would share the additional transportation costs of importing alternative supplies.
• It plans to establish a reinsurance scheme for shippers in case overseas reinsurance becomes unavailable in order to ensure stable operations.
• The plan aims to build national naphtha reserves in the form of crude oil after shortages of the petrochemical feedstock, used in plastics and printing inks, caused disruptions.

The plan also features measures to expand cleaner energy sources such as nuclear power and renewables.

Japan, which spends over 20 trillion yen ($125.8 billion) annually on fossil fuel imports, aims to improve energy self-sufficiency by replacing 2–5 nuclear reactors in the 2040s and 11–14 in the 2050s, while building domestic supply chains for perovskite solar cells, next-generation geothermal and offshore wind power.

($1 = 159 yen)