Japan to Unveil New Oil Diversification Strategy

Japan is set to unveil a new energy import diversification strategy that aims to reduce its reliance on Middle Eastern oil and gas supplies. The plan includes provisions for pipeline support in the Middle East to divert export oil flows away from the Strait of Hormuz, according to Reuters, citing Japanese media. The government intends to share the higher costs of importing crude from alternative sources, such as the United States, Canada, African oil producers, and Azerbaijan.

The shift to these alternative suppliers came after the U.S.-Israeli war with Iran broke out. In the past month, Japan's total import bill for oil hit a record high of $76.39 billion due to increased global oil prices. The country has also reduced its reliance on gas-fired power generation, opting for coal instead, as the price of liquefied natural gas remained high.

This trend is evident in many Asian countries, as they switch from gas to coal due to affordability and availability concerns. Japan has released crude oil from its strategic reserves to address the effects of the war on its energy security and economy, but this has left the reserves depleted and in need of replenishment.