Japan Diversifies Oil Imports with Mid-East Pipeline Investments

Japan is seeking to diversify its oil import routes by investing in pipeline projects abroad. The country's economy ministry has allocated risk-capital funding for Japanese companies to invest in Middle Eastern pipeline networks, as reported by Bloomberg.

This move comes after Saudi Arabia and the UAE approached Japan to participate in the expansion of oil pipeline networks in the region amid efforts to shift flows away from the Strait of Hormuz.

Before the Iran war, Japan relied on the Middle East for 95% of its crude imports. However, the conflict led to a significant decline in energy imports from the region, with April 2026 imports plummeting by 67.2% compared to the same month in 2025. The volume of oil imported in April 2026 was estimated at 3.843 million kiloliters, the lowest since data collection began in 1979.

Japan's refiners have been seeking alternative imports and releasing crude from its strategic reserve to offset the lack of supply through the Strait of Hormuz. The country's oil import bill has increased, reflecting international oil price movements, with June imports reaching a record $89.46 billion despite a 13.7% decrease in volume compared to the previous year.