Japan’s Crude Oil Import Price Hits Record High Amid Middle East War

  • Japan’s crude oil import price hit a record high in yen terms in May 2026, driven by a surge in crude prices resulting from supply disruptions caused by the closure of the Strait of Hormuz. The customs-cleared import price rose to 114,076 yen (US$712) per kilolitre, surpassing the previous record of 101,389 yen set in April 2026.
  • In dollar terms, the price stood at US$114.58 per barrel, the 17th highest on record. The increase reflects the sharp rise in global crude prices following disruptions to one of the world’s most important energy shipping routes.
  • Japan’s crude import price, known as the Japan Crude Cocktail (JCC), is based on customs-cleared CIF (cost, insurance and freight) prices and reflects global crude trends with roughly a one-month lag due to shipping times. Higher JCC prices raise the cost of importing both crude oil and liquefied natural gas (LNG), a key fuel for thermal power generation, and feed directly into higher electricity prices.
  • Crude oil import volumes fell 57.3% year-over-year in May, following a 64% plunge in April, the steepest decline since 1980. Despite higher prices, the value of crude imports fell 28.5%, reflecting the sharp contraction in import volumes.
  • By region, imports from the Middle East tumbled 61.9% to 3.967 million kilolitres, while imports from the United States rose 24% to 576,000 kilolitres, suggesting Japan has increasingly turned to alternative suppliers to offset shortages from its traditional sources.
  • Before disruptions to the Strait of Hormuz, Japan sourced about 95% of its crude imports from the Middle East, underscoring the country’s heavy dependence on the region for energy security. The sharp rise in Japan’s crude import prices highlights the economic impact of the Strait of Hormuz disruption on major energy-importing nations.
  • While Japan has increased imports from the United States and other sources, the country’s heavy reliance on Middle Eastern crude means higher energy costs are likely to continue feeding through to electricity prices and inflation, adding to the Bank of Japan’s concerns over persistent price pressures.

(Source: Reuters)