What Is Japan’s Strategy in the New Power Game over Crude Oil?

By Akihiro Okada

8:00 JST, March 28, 2026

The escalating conflict in Iran and the closure of the Strait of Hormuz threaten Japan’s energy security.

Russia’s invasion of Ukraine and the attacks on Iran by the United States and Israel have once again demonstrated that energy has become a key element in the power games among major nations.

Japan must drastically restructure its energy security policy to respond to this new international order.

Japan’s energy strategy has been based on diversifying its sources of crude oil and liquefied natural gas, ensuring stability through long-term contracts, and mitigating the risk of supply disruptions through ample stockpiles. Amid global warming, Japan relies on nuclear power as a key source of electricity while also pursuing solar and wind power.

Japan depends on two Middle Eastern nations for more than 80% of its crude oil imports: the United Arab Emirates (43.3%) and Saudi Arabia (39.4%). Its overall dependence on the Middle East stands at 94%, with imports via the Strait of Hormuz accounting for 93% of this total. No progress whatsoever has been made in diversifying of Japan’s sources of crude oil.

Although Iran is in the Middle East, unlike Arab countries, it is a multi-ethnic nation with a large Persian population and a different political landscape. Historically, Japan has also placed importance on procuring crude oil from Iran.

The Azadegan oil field in Iran has had a particularly eventful history.

In 2000, Japan secured right of first refusal to develop this significant oil field. However, by 2003, U.S. concerns about Iran’s nuclear program had pressured Japan to reconsider involvement in Azadegan.

I wrote an article headlined “Iran oil field deal at risk” in September 2003, because Iran invited bids from major oil companies in Europe and China.

However, the Japanese government subsequently showed tenacity.

Against the backdrop of the United States’ hardline stance toward state sponsors of terrorism, Iran signed the Additional Protocol of the International Atomic Energy Agency, agreeing to accept nuclear inspections.

As Iraq began moving toward reconstruction, Japan demonstrated its willingness to contribute by dispatching the Self-Defense Forces and providing financial support.

This led to a softening of the U.S. stance, and the Japanese government decided to proceed with the contract in 2004.

From the perspective of long-term relations with the United States, if Japan had abandoned the contract while still accepting U.S. requests, it could have intensified criticism of Japan’s subservience to the United States and potentially heightened anti-American sentiment among the public. The Japanese government is also believed to have judged that proceeding with the Azadegan oil field contract was the better course of action, to avoid casting a shadow over the positive Japan-U.S. relationship.

However, in 2010, the Japanese government was once again forced into a difficult position regarding the Azadegan oil field in its dealings with the United States.

In 2010, U.S. sanctions on Iran intensified. The U.S. moved to add Japanese company Inpex Corp. to its sanctions list, pushing Japan to withdraw from the Azadegan project.

The administration of U.S. President Barack Obama, who took office in 2009, initially adopted a conciliatory stance toward China. The United States did not necessarily have a favorable attitude toward Japan.

Prime Minister Naoto Kan strongly desired to maintain Japan’s interests. However, Japan was forced to withdraw from the Azadegan oil field in exchange for the U.S. exempting Inpex from sanctions, and Japan consequently revised its energy security strategy.

China seized the opportunity presented by Japan’s vulnerability and secured a major stake in the Azadegan oil field.

Russia was once a strong candidate in Japan’s efforts to diversify its crude oil sources.

Japan and China competed fiercely over the East Siberian oil fields in the 2000s.

Russia planned two pipeline routes: the “China Route” to Daqing, China, and the “Pacific Route” connecting to Nakhodka on the Sea of Japan coast.

Faced with China’s head start, Prime Minister Junichiro Koizumi sought to promote the Pacific Route — which would enable crude oil supplies to Japan — during a 2003 summit with President Vladimir Putin and received a positive response.

Subsequently, former Prime Minister Yoshiro Mori and other government officials visited Russia in succession, continuing their strenuous diplomatic efforts.

Japan’s focus on Siberian crude oil stems from its desire to reduce its dependence on the Middle East for crude oil imports and ensure a stable energy supply. Japan estimated that securing Siberian crude oil could lower Japan’s dependence on the Middle East — which stood at about 90% at the time — to 65%.

However, China, which had achieved economic growth at an overwhelming pace, ultimately prevailed in this race as well. Russia began supplying crude oil to China via the Siberian pipeline in January 2011. Japan had long boasted the world’s second-largest GDP after World War II, but in 2010, China overtook Japan, which fell to third place. These events illustrate the difference in momentum between Japan and China’s economic power.

Looking back over the past quarter-century of competition with major powers over crude oil, one must conclude that the outlook for Japan’s energy security is grim.

Oil is used not only as fuel for automobiles, aircraft, heating and power plants, but also as a raw material for chemical products such as plastics, clothing and synthetic rubber. It is an extremely important commodity that supports the lives of people in industries, transportation and households.

Building constructive economic relations with Russia, which invaded Ukraine, or with Iran, is unfeasible for the foreseeable future.

We are also likely to face difficulties in energy competition with China, whose GDP is now more than four times that of Japan.

During her meeting with U.S. President Trump on March 19, Prime Minister Sanae Takaichi highlighted energy-sector cooperation — including Alaskan crude oil — as a key achievement.

Given the current state of relations with major powers like China and Russia, Takaichi is likely to feel increasingly strongly that deepening Japan-U.S. cooperation is essential not only for the Japan-U.S. alliance but also for the energy sector.

Globalization has accelerated since the 1990s. The international division of labor has intensified, productivity has surged and global prosperity has risen sharply.

However, the United States — which promoted the postwar international order based on the rule of law, democracy, and free trade — is now facing domestic political challenges, such as social divisions and widening inequality. As a result, it is stepping down from its role as the driving force behind this order.

What is emerging as a new world order is a system of great-power politics centered on the United States, China and Russia — often referred to as the “New Yalta System.”

In this changing environment, the era in which one could buy any product simply by paying for it has come to an end.

Therefore, strategies for economic security — ensuring a stable supply of products and services essential to people’s daily lives — are indispensable.

The development of a global economy based on the rule of law and democracy has brought immense benefits not only to the world but also to the United States.

However, for major powers such as the United States, China and Russia, it has likely come to be seen merely as a constraint on their actions.

For middle powers such as Japan, the United Kingdom, Germany and France, the rule of law and democracy remains vital for their own protection.

As the major powers intensify their struggle over energy resources, Japan must adopt a complex strategy. While recognizing the foremost importance of its alliance with the United States, Japan needs to engage in diplomatic maneuvering with all major powers — through military, economic and sanctions-related means — to uphold democracy and the rule of law and secure its own national autonomy.

Political Pulse appears every Saturday.

Akihiro Okada

Akihiro Okada is a vice chairman of the editorial board for The Yomiuri Shimbun.