Japan to support Middle East oil pipelines bypassing Strait of Hormuz

Japan’s government plans to adopt an energy security package that includes support for the construction of alternative oil pipelines in the Middle East to enable crude shipments to bypass the Strait of Hormuz, Japanese business newspaper Nikkei reported.

The plan is expected to be formally approved at a Cabinet meeting on Wednesday, August 19. It will also include measures to build up oil stocks for the production of naphtha, a key feedstock for the petrochemical industry whose potential supply disruptions have raised concerns among Japanese businesses.

According to Nikkei, Japanese Prime Minister Sanae Takaichi is expected to present the plan at the Cabinet meeting. Saudi Arabia is among the countries working to develop alternative oil pipeline routes, the newspaper reported, adding that Japan is expected to support such initiatives.

Under the proposed program, Japan would subsidise costs incurred by oil refineries and other companies purchasing crude through alternative routes. Insurance coverage could also be provided for such shipments.

The measures are intended to strengthen Japan’s energy security amid disruptions to shipping through the Strait of Hormuz, a critical route for global oil supplies.

By Tamilla Hasanova