Oil Importers Diversify Supply Routes Amid Geopolitical Tensions

The ongoing tensions involving Iran have pushed major oil importers to diversify their supply routes and reduce exposure to geopolitical shocks.

Until recently, countries like Japan sourced over 90% of their crude oil from Middle Eastern suppliers via a relatively straightforward 21-day voyage. However, since the conflict disrupted Gulf exports in late February, outbound crude flows from the Middle East have dropped drastically, with total volumes shipped from March through July 40% lower than a year earlier.

Japan has been forced to secure more crude from alternative suppliers, most notably from North America. Total Japanese crude oil imports from the U.S. from March through June topped 4.5 million metric tons, compared with less than 1 million tons during the same period in 2025.