Japan booked a trade deficit of $17.8 billion (2.82 trillion Japanese yen) for April to September, almost double the deficit from a year earlier, government data showed on Wednesday, as the Middle East crisis made energy imports into the resource-poor G7 economy much more expensive.
Between April and September, the period right after the Iran war began and choked oil and LNG supply at the Strait of Hormuz, the value of Japan’s exports rose by 18.4% while the value of imports jumped by 20.4%, according to the Finance Ministry’s provisional data for the first half of the fiscal 2026 year.
While the volume of petroleum imports fell by 21.2%, the value surged by 26.3%. Petroleum product imports slumped by 26.8% in volume but rose by 23.2% in value.
LNG import volumes also fell by 8.4% from the same period last year, but the value of imports increased by 13.5%, the data showed, reflecting the surge in oil and LNG prices in the six months to September.
Japan’s oil import bill has soared to record highs following the closure of the Strait of Hormuz – the G7 economy’s key import source before the war – the spike in crude oil prices, and skyrocketing freight and insurance costs.
In addition, Japan, one of the world’s biggest LNG importers, this summer reduced gas-fired generation in favor of coal as the price of liquefied natural gas remained elevated.
Since the war in the Middle East began, Japan has scrambled to secure crude oil supply from alternative sources as its dependence on crude from the Middle East passing through the Strait of Hormuz was more than 90% of all crude imports.
The G-7 economy has moved to release crude from its strategic reserves as part of an IEA-coordinated global effort to release 400 million barrels of crude and oil products.
Earlier this month, the Japanese government approved three bills to boost diversification of oil supplies and energy security, including grants to compensate Japan’s oil importers for the high shipping costs to procure supply from outside the Middle East.
By Tsvetana Paraskova for Oilprice.com
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