In a bid to counter the escalating fuel prices triggered by the Israel-Hamas conflict, Japan, the fourth-largest global purchaser of crude oil, is calling upon oil-producing nations, including its primary suppliers Saudi Arabia, the United Arab Emirates, and Kuwait, to enhance their output. This move was articulated by Hirokazu Matsuno, the Chief Cabinet Secretary of Japan, who emphasized the need for these nations to invest in their production capacities to stabilize the volatile global oil market.
Japan’s reliance on Middle Eastern oil sources, where over 90% of its 2.70 million barrels per day imports originate, places the nation in a precarious diplomatic situation due to the ongoing conflict. The situation has been further compounded by Israel’s military operation in Gaza in response to Hamas’ attack on October 7.
As fuel prices surged following the outbreak of hostilities, benchmark Brent crude oil futures recorded an increase of over $5 per barrel. However, the tension seemed to ease somewhat as the Organization of the Petroleum Exporting Countries (OPEC) signaled its reluctance to immediately act on OPEC member Iran’s call for an oil embargo on Israel.
Japanese Prime Minister Fumio Kishida, who had previously visited Gulf nations in July, engaged with Saudi Crown Prince Mohammed bin Salman to discuss humanitarian efforts in Gaza and tension alleviation. While discussions did not explicitly cover the stabilization of the crude oil market, Matsuno conveyed Japan’s request for relevant countries, especially Saudi Arabia, to take a proactive role in restoring stability to the global crude oil market, which includes increasing production.
It’s worth noting that Japan, as a member of the International Energy Agency, has a track record of releasing oil reserves in response to major supply disruptions, with the most recent instance occurring in 2022 following the Russian invasion of Ukraine.
