The country’s heavy reliance on Middle Eastern crude—which historically accounted for 90% of imports—collapsed when regional conflict effectively shuttered the Strait of Hormuz. To compensate, Tokyo has turned to distant producers in Canada, Azerbaijan, and Africa. While these shipments keep the economy running, the logistical premiums have sent energy costs to historic highs. In June alone, Japan’s crude import bill reached $89.46 billion, a figure that is now rippling through the broader economy.

A Teikoku Databank survey from June confirms the severity of the situation, with 90% of domestic companies reporting that rising energy prices are actively damaging their operations. This shift marks a historic departure for the energy-starved nation, which recorded its lowest volume of Middle Eastern crude imports in April since 1979. To soften the blow, the government participated in an IEA-coordinated release of strategic petroleum reserves, but this stopgap measure does little to offset the long-term structural burden of sourcing oil from across the globe.