Japan's Energy Security Threatened

Kashiwazaki-Kariwa Nuclear Power Plant

Concerns on Energy Scarcity

By Takuya Nishimura, Senior Fellow,  Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
April 8, 2026

It is possible that Japan will go back to the stone age before Iran does. Concern about an energy shortage is growing in Japan ever since the United States began to attack Iran and Iran effectively blocked most oil exports through the Strait of Hormuz, including those headed to Japan. Sanae Takaichi’s administration has been taking interim measures to remedy the resulting shortage and to limit oil price hikes. However, the government of Japan does not have a clear path to get through its current energy scarcity.

In 2025, Japan depended on the Middle East for 94 percent of its crude oil. The ratio had increased from 72 percent in 1990 as Indonesia and China reduced their exports to Japan and later as Russian oil became unreliable after it started the war with Ukraine. Now that Iran has created a de facto blockade in the Strait of Hormuz, Japan has not found any alternative route to transport oil from the Middle East.

Gasoline prices immediately responded to the attacks on Iran by the U.S. and Israel. The retail price of regular gasoline rose from 153 yen per liter in late February to 183 yen in the second week of March. Gasoline retailers always raise the gasoline price more swiftly than reducing it. Long lines of cars waiting to get gas were common at service stations by early March.

Prime Minister Takaichi decided to subsidize gasoline retailers to bring the gasoline price down to 170 yen per liter. She found resources for the subsidy in a governmental fund established during the COVID-19 pandemic to stabilize living standards. Although the regular gas price is controlled at 170 yen for now, the subsidy is not very sustainable because it will upset the government’s financial balance if it is prolonged.

Japan had an oil reserve for 254 days when the war in Iran began. The Ministry of Economy, Trade and Industry (METI) announced that it would eventually release that reserve as needed to maintain the supply to industries and families. Following the release of a fifteen-day supply from a private reserve on March 16, the government released a month’s supply from the national reserve on March 26. It was the first release from the oil reserve since 2022 when Russia invaded Ukraine.

It is undeniable that the release of oil reserves is an interim measure. Concern about an oil shortage is spreading throughout the business sectors. One key product is naphtha, which is refined from oil and which serves as a raw material for chemical products. It is used, for example, in making a thinner that removes grease from industrial machines. In his press conference, Chief Cabinet Secretary Minoru Kihara dismissed social media rumors that the Japan’s supply of naphtha would run out in June.

A major oil retailer, Idemitsu, decided to reduce production of another oil-based product, ethylene used for plastic bags. Price hikes in oil will also reduce the supply of polyester for clothes and acetone for cosmetics.

Elsewhere, the negative impact on power generation is immeasurable. Japan depends on thermal power generation for 70 percent of its electricity. The fuel for this 70 percent breaks down to a little more than 30 percent in natural gas, a little less than 30 percent of in coal, and 10 percent in oil. An oil shortage thus puts 10 percent of Japan’s total power generation at risk.

It is urgent that the government of Japan find alternative fuel for power generation before the beginning of summer, the season when the Japanese need copious amounts of electricity to cool every room in the house. Deaths from heat stroke is so prevalent that they no longer make a news. The Takaichi administration did decide to increase the share of coal as a fuel for thermal power generation for a year to cover for the potential shortage of oil. Takaichi did not rule out a request for citizens to conserve power this year, while she insisted that it would not be necessary, with the perspective of enough oil for next year at least.

A shortage of oil from the Middle East also may make it harder than ever for Japan to meet its of carbon emission target. Japan has set targets of a 46 percent cut in the 2013 level of emissions by FY2030 and a 73 percent cut by FY2040. Japan has promised net zero carbon emissions by 2050. Oddly enough, there has been no immediate discussion in the Japanese government on how to increase renewable energy to cover an oil shortage.

One theoretical alternative is nuclear power. Japan cannot, however, look to this source of energy, having imposed strict regulations after a catastrophic accident in the Fukushima Daiichi Nuclear Power Plant in 2011. Although the government restarted a reactor in the Kashiwazaki-Kariwa Nuclear Power Plant in January, the reactor suffered repeated, unexpected malfunctions in its control system.

Nuclear power generation also presents another problem: there is nowhere for the nuclear waste produced from a nuclear reactor to go. A law on nuclear waste directs that used nuclear fuel be buried underground, but Japan has yet to find a suitable location.  While the government hopes that Minamitorishima Island in the middle of Pacific Ocean will be a candidate site, it will take decades to finish geological research.

There is an interim facility to store used nuclear fuel in Aomori prefecture. Some used fuel has already been transferred to the facility. But the governor of Aomori, Soichiro Miyashita, has refused to permit further transfers to the facility without a designated final disposal site to which the used nuclear fuel in the prefecture will be transferred. All things considered, then, nuclear power cannot replace oil as an energy resource for present-day Japan.

The U.S. President Donald Trump announced two-week ceasefire in Iran, based on conditions including opening the Strait of Hormuz. However, the deal does not guarantee Iran’s safety from future attacks by the U.S. or Israel, which means the ceasefire may not work for to lower the price of oil price. 

In the absence of an immediate replacement for oil, the government of Japan is looking for alternative routes to transport oil from the Middle East. But it has not found viable waterways so far. The war in Iran thus has revealed Japan’s energy vulnerability – a condition like the one that put them on the road to World War II.