Surging Oil Prices Push Japan’s Import Bill to an Unprecedented High

Surging oil prices have led to a significant increase in Japan’s import bill, hitting an all-time high last month of $89.46 billion, Reuters has reported, citing government data.

The June total was 25.4% higher than a year earlier, as international oil prices rose by over 50% in the 12 months since last July, according to Bloomberg data, as cited by Saxo Bank. In the year to date, Brent crude and WTI have surged by over 60%.

“Japan’s diversification of oil procurement sources is progressing, with purchases from the United States and Russia surging, while declines in imports from the Middle East have moderated,” Daiwa Institute of Research economist Koki Akimoto said, as quoted by Reuters.

The June volumes of imported oil were down by 13.7% on a year earlier. In terms of value, however, oil imports rose by a substantial 59.3%, the government data showed.

Resource-poor Japan is one of the biggest energy importers globally and relied on the Middle East for as much as 95% of its oil imports before the war broke out. Now, the country is switching to suppliers outside the war-torn region.

With traffic in the Strait of Hormuz still slowed to a trickle at 90% lower volumes compared to before March 2026, Japan has turned to suppliers, including the United States, Azerbaijan, South Sudan, and Russia’s Sakhalin oil supply, which was never sanctioned because of the Japanese dependence on it.

This has helped Japan maintain its oil supply security but has come at a cost and growing fears about inflation. Reuters reported that Japan’s central bank was expected to leave interest rates unchanged at a meeting this week and extend its tightening policy in response to higher energy costs. These are now likely to climb even higher as the situation in the Middle East remains tense and the prospect of peace distant.

By Irina Slav for Oilprice.com

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