Japan turns to Azerbaijan for additional oil supplies

Japan expects to secure additional oil supplies from Azerbaijan as part of a broader strategy to stabilise energy imports and meet domestic demand through at least the end of 2026, according to a report by public broadcaster NHK.

Citing government sources, the report said Tokyo plans to rely on a combination of alternative supply routes and the release of strategic reserves to offset disruptions linked to the situation around the Strait of Hormuz. While alternative procurement routes are expected to account for only 20% of last year’s oil import volumes in April, the government aims to raise that figure to 60% by May.

Key alternative routes include shipments from the United Arab Emirates via the port of Fujairah and from Saudi Arabia through the Red Sea port of Yanbu. Each of these suppliers is said to be capable of covering roughly half of Japan’s domestic oil demand.

In addition, the United States could increase oil exports to Japan by as much as four times compared to last year, primarily through terminals in Texas. Azerbaijan is also expected to contribute additional volumes to Japan’s supply mix.

To bridge any remaining shortfall, Japan has already begun drawing on its strategic reserves, with releases starting in mid-March. On March 16, authorities launched market sales of reserve oil equivalent to 45 days of national demand, offering it to wholesale companies at prices aligned with levels seen before the start of US and Israeli strikes on Iran.

Japan’s total oil reserves — held by both the government and private companies — are estimated at approximately 470 million barrels, enough to cover 254 days of domestic consumption.

By Tamilla Hasanova