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Nearly five months into the closure of the Strait of Hormuz, Japan has drawn on a hard-won lesson from the oil crises in the 1970s: the need for timely stockpile drawdown to buy time for energy security.
That is the assessment of Dr. Ken Koyama, Senior Advisor at the Institute of Energy Economics, Japan (IEEJ), who spoke to Japan Forward about how the country's energy security is holding up.
A Vulnerability Exposed, But Cushioned
Japan's dependence on the Middle East for crude oil imports stood at over 90% in 2025, among the highest levels on record—a figure Koyama says leaves little room for debate about the risk.
But he argues the impact has been softened by two structural shifts since the 1970s: a sharply reduced share of oil in Japan's total primary energy supply, and a substantial stockpile to draw on this time around.
"Compared to the oil crisis half a century ago, the impact on Japan's economy as a whole from rising oil prices or supply disruptions has been mitigated," he said, calling the reserves "an important achievement, or strength, that Japan has built up to cover its vulnerability."
Racing the Clock
Those reserves were, in Koyama's analysis, the only thing standing between Japan and an immediate supply gap. When the war broke out on February 28 and the flow of Middle Eastern oil stopped, Japanese firms scrambled to find alternative sources of supply, mostly from the United States.
But even successful deals struck in early March, he explained, could not physically deliver oil to Japan before May at the earliest, given the lead time required to negotiate contracts and ship crude across the Pacific.
To bridge that gap, Japan turned to its stockpiles. With no alternative crude oil able to reach Japan before May, Koyama pointed to Prime Minister Sanae Takaichi's move on March 11 as the decision that kept supply from breaking down in the interim: "This was a very important decision, made swiftly and timely, as a matter of national policy—to endure the crisis using reserves in order to avoid halting Japan's oil supply."
No End in Sight
Asked when the crisis might end, Koyama said it was impossible to predict, with Washington's, Tehran's and especially President Donald Trump's next moves difficult to read.
The June Memorandum of Understanding (MOU) briefly raised hopes of reopening the Strait before talks collapsed into renewed strikes, followed by another pause in recent days.
"Some market participants became very optimistic that once the MOU was reached, the problem was essentially solved and that Hormuz traffic would head toward normalization," Koyama said. "What has become clear is that we should not lean too easily into that kind of optimism."
He expects the volatility to persist at least through the second half of this year.
LNG's Narrower Margin
Koyama noted that Saudi Arabia and the UAE will maximize crude export via bypass pipelines to offset part of the lost volume from the closure of the Strait of Hormuz—the 7 million-barrel-per-day East-West pipeline to Yanbu and the 1.8 million-barrel-per-day pipeline to Fujairah.
However, no such alternative exists for refined petroleum products or liquefied natural gas.
LNG transiting Hormuz totals roughly 80 million tons a year, about 20% of global supply, all of which has been cut off for the duration of the closure.
Compounding that, Iranian strikes have damaged nearly a fifth of Qatar's production capacity—the world's second-largest LNG exporter. Koyama said repairs could take years. "Even if the Strait of Hormuz reopens, supply from Qatar will remain significantly reduced."
That tightening LNG market feeds directly into the LNG spot price, and higher crude oil prices will put pressure on LNG import prices in Japan—though Koyama argues those pressures have yet to fully show up in what consumers actually pay because of the subsidies.
Subsidies Cushion Households, Strain the Treasury
On the weak yen's role in the crisis, Koyama pointed out that Japanese households have so far been largely shielded from gasoline price spikes thanks to mitigation subsidies introduced in March—a policy that keeps consumer prices flat but shifts the burden onto state finances.
"In terms of what the public directly pays, that burden has not materialized," he said. However, he cautioned that oil-to-LNG price pass-through typically takes three to four months, meaning the full effects of the weak yen on electricity bills are still working their way through the system toward the end of the year, depending on future oil prices.
Nuclear Momentum, But No Shortcut
Subsidies, in other words, can only buy time on the cost side—they do nothing to change Japan's underlying exposure to imported fuel. One of the important and real structural fixes, in Koyama's view, is nuclear power.
But he was clear that this is a long game, not a quick one. It is not easy to expect faster restarts driven by the current crisis to meaningfully offset fossil fuel dependence in the near term, since safety reviews and local consent processes won't accelerate simply because oil prices have risen.
Still, he pointed to recent progress—the restart of Kashiwazaki-Kariwa Nuclear Power Station and a decision to restart Hokkaido's Tomari plant—as signs that "momentum toward nuclear restarts is building."
A Two-Track Response
Looking ahead, Koyama argued that securing Japan's own energy future can no longer be treated as a purely domestic problem. Because Japan's supply chains are now so tightly integrated with the rest of Asia, he said, instability in the region's energy security ultimately feeds back into Japan's own.
That logic, he explained, is behind the government's new POWERR Asia initiative, which offers financial support to Southeast Asian nations procuring oil supply as well as building their own oil reserves—a deliberate echo of how the US organized OECD countries into the establishment of International Energy Agency after the 1970s oil shocks, when collective stockpiling became a shared line of defense rather than a favor to weaker members.
"Japan now needs to make a comparable effort for Asia's energy security," he said, alongside deeper cooperation with Saudi Arabia, the UAE, and the United States.
Koyama argued that, over the longer term, Japan may explore further reducing its reliance on Middle East crude in particular via the Strait of Hormuz and build a more flexible refining system capable of processing oil from other sources—a structural challenge he expects to be one of the dominant issues in Japan's energy policy debate through the rest of the year.
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Author: Daniel Manning
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