Hormuz crisis has forced Japan into rethinking – and domesticating – its energy security needs

Japan’s Foreign Minister Motegi Toshimitsu has been reaching out to his Iranian counterpart Abbas Araghchi to express his concerns over the de facto closure of the Strait of Hormuz since September 8, 2026. This crisis has had a significant impact on Japan, as the Strait of Hormuz carries 93% of the nation's crude oil imports, while the Middle East as a whole supplies 94%.

Although stockpiles and domestic refining capacity have mitigated the shock, the crisis has exposed Japan's vulnerability to a maritime security environment it does not control.

In response to the crisis, Japan has introduced an energy-security package called POWERR GX, which aims to increase energy resilience and domestic capabilities. The package seeks to diversify crude oil and naphtha supplies by strengthening reserves, supporting alternative transport routes, securing shipping insurance, and expanding nuclear power.

This approach reflects a broader shift in Japan's strategy, as it simultaneously enhances energy independence and develops the necessary financial, logistical, and diplomatic tools to respond when the United States cannot guarantee security conditions.

One notable aspect of Japan's response is the establishment of a state reinsurance mechanism. This mechanism would help maintain insurance coverage for Japanese shipping in the face of rising costs and insurance contract cancellations, as seen after the U.S.-Israeli strikes on Iran. Japan's government would assume part of the risk faced by private insurers, enabling Japanese vessels to continue operating in the region despite security threats.

Additionally, Japan is working on restoring its crude reserves to the International Energy Agency's 90-day standard by fiscal year 2026–27, with a target to include domestically refined naphtha by fiscal year 2027–28. The country is also considering domestic stockpiles of U.S.-sourced crude and a dedicated naphtha reserve to further enhance its energy resilience.

In the meantime, Japan is supporting Arab Gulf producers in reducing their dependence on Hormuz by funding pipeline expansions that bypass the strait. While these measures increase resilience for Japan, they do not result in complete independence, as even expanded capacity would only cover a fraction of the typical 20 million barrels a day that normally transit the strait.

Nonetheless, these steps aim to bolster Japan's energy security while fostering closer partnerships with regional partners like Saudi Arabia and the UAE.