• Japan plans to purchase an additional 20 million barrels of crude oil from the United Arab Emirates to secure supply amid heightened tensions in the Strait of Hormuz.
  • The move is part of Tokyo's broader strategy to diversify import routes and reduce reliance on the strategic chokepoint.
  • Talks are ongoing with Saudi Arabia for similar arrangements, according to people familiar with the matter.

A Strategic Hedge

Japan is doubling down on its efforts to shield its energy supply from geopolitical risks in the Middle East. The government has reached a preliminary agreement to buy 20 million barrels of oil from the UAE, bypassing the Strait of Hormuz, Nikkei reported on Wednesday. The crude will be shipped via alternative routes, including the Fujairah terminal on the UAE's east coast, avoiding the narrow waterway that Iran has threatened to block.

“We are in the final stages of securing this arrangement,” a Japanese trade official told Bloomberg, declining to be named as the talks are private. “Ensuring stable supply is our top priority.”

The UAE, home to the Fujairah port, has emerged as a key partner in Japan's energy security plans. The facility, which sits outside the Strait of Hormuz, allows for direct loading of tankers without crossing the volatile chokepoint.

A Broader Push for Diversification

Tokyo has been aggressively seeking alternative supply routes since early this year, when U.S.-Iran tensions flared and raised the specter of a blockade. In addition to the UAE deal, Japan is in talks with Saudi Arabia to secure similar volumes via the Red Sea port of Yanbu, according to two people with direct knowledge of the matter.

“Japan is trying to cover several months of consumption through these diversified sources,” said Keisuke Sadamori, a senior analyst at the Institute of Energy Economics, Japan. “Hormuz remains a bottleneck, but these moves reduce the immediate risk.”

Japan, the world’s fourth-largest crude importer, relies on the Middle East for roughly 80% of its oil, with the vast majority passing through Hormuz. The government has also tapped strategic reserves in recent months, but officials say further releases may be needed if tensions persist.

Implications for Prices and Shipping

The fresh procurement could put upward pressure on global oil prices, given the additional demand for secure, non-Hormuz barrels. Freight rates for alternative routes have also climbed, as shippers compete for capacity at Fujairah and Yanbu.

“We expect premiums for non-Hormuz supply to stay elevated through 2026,” analysts at Energy Aspects wrote in a note Thursday. “This is a structural shift, not a short-term fix.”

Japan's efforts echo those of other Asian importers, including South Korea and India, which have similarly sought diversions. The moves are reshaping regional oil trade flows, with more barrels now moving through alternative corridors.

Attempts to reach the Ministry of Economy, Trade and Industry for comment were unsuccessful.

Correction: An earlier version of this article misstated the volume of oil Japan plans to purchase from the UAE. It is 20 million barrels, not 30 million.