How Japan and China are navigating the Middle East oil crisis.
Japan is facing a major energy challenge due to the ongoing US-Israel war with Iran, which has severely disrupted oil tanker traffic through the Strait of Hormuz (a chokepoint for about 20% of global oil and the route for most of Japan’s imports).
Japan imports over 90% of its crude oil from the Middle East, making it highly vulnerable – though it maintains large strategic stockpiles (equivalent to about 254 days of domestic demand as of late 2025).
The most recent key decisions by the Japanese government under Prime Minister Sanae Takaichi, as of March 31, 2026, focus on immediate supply stabilization, price mitigation, and longer-term resilience. Here is the timeline and details of the latest actions:
Largest-ever strategic oil reserve release (ongoing as of late March 2026). Private-sector reserves: Release of 15 days’ worth began on March 16, 2026 (unilateral action ahead of full IEA coordination). State/national reserves: The biggest release in Japan’s history started on March 26, 2026 (a Thursday). This involves 80 million barrels total (including private stocks), or about 45 days of domestic demand / one month’s state-held oil (8.5 million kiloliters from 11 national bases). Oil began flowing from sites like the Kikuma base on March 26.
Joint reserves: Japan is also tapping stockpiles co-owned with Middle Eastern producers (e.g., UAE) stored in Japan, with releases starting by late March. This is Japan’s first major unilateral drawdown since the 2022 Ukraine-related IEA action and is coordinated with G7/IEA efforts (e.g., US and South Korea are also releasing reserves).
International coordination and contingency planning. On March 25, 2026, PM Takaichi met IEA Executive Director Fatih Birol and explicitly asked for preparations for an additional coordinated IEA oil stockpile release if the crisis drags on. Japan continues close coordination with the IEA while emphasizing it will act quickly if needed.
Domestic economic safeguards (fuel subsidies and supply chain review). Fuel subsidies were reintroduced (or expanded) to cap regular gasoline prices at around ¥170 per liter and stabilize diesel, heavy oil, and kerosene prices. On March 24, PM Takaichi ordered a full review of the entire petroleum product supply chain (from crude to petrochemicals like naphtha used in plastics, autos, and food packaging). The government is monitoring for broader inflation (a sustained 10% oil price rise could add up to 0.3 percentage points to consumer inflation over a year).
At a second Cabinet meeting on the crisis, PM Takaichi directed ministers to expand cooperation with Asian neighbors to secure critical supplies (e.g., medical goods like syringes and dialysis equipment that rely on petroleum-derived materials). She emphasized maintaining stable operations for Japanese companies across Asia and preparing for potential prolonged disruptions.
The Finance Ministry is exploring (and sounding out markets on) an unorthodox intervention in crude oil futures markets – using foreign exchange reserves to build short positions – to help ease price pressure on oil and the yen.
These measures are designed to bridge short-term shortages while the government assesses risks of prolonged disruption. Japan’s reserves provide a strong buffer for now, but officials have warned of lasting economic impacts if the Hormuz situation persists. No military involvement (e.g., escorting tankers) has been announced; the focus remains on energy security and diplomacy.
China’s approach to the ongoing Strait of Hormuz oil crisis (triggered by the US-Israel-Iran war) contrasts sharply with Japan’s in scale, style, and reliance on multilateral vs. unilateral tools. As the world’s largest crude importer (with roughly 50% of its oil from the Middle East, including heavy Iranian volumes), China has faced disruptions but appears far better insulated due to aggressive pre-crisis stockpiling, supply diversification (e.g., overland Russian pipelines for gas and oil), and domestic production. Beijing has not joined the IEA-coordinated reserve releases and has avoided large public drawdowns of strategic reserves so far.
China’s Key Recent Decisions
Massive pre-built reserves as primary buffer (no major strategic release announced). China holds an estimated 1.2-1.4 billion barrels in combined strategic and commercial stockpiles (100-130 days of import cover at current demand). It accelerated stockpiling in Jan-Feb 2026 (surplus of 1.24 million bpd).
Analysts (e.g., FGE) expect a possible drawdown of commercial/operational stockpiles (up to 1 million bpd over 4-6 weeks) to support refiners, but strategic reserves remain untouched. State firms like Sinopec and PetroChina report “overall normal” operations, with Hormuz accounting for only 10% of PetroChina’s supplies. No unilateral public release comparable to Japan’s has occurred.
Domestic price controls and export restrictions (March 11-23). On March 11: Immediate halt to refined fuel exports (Sinopec also signaled 10% output cuts). On March 23: National Development and Reform Commission (NDRC) imposed temporary regulatory caps on retail fuel prices – the largest intervention in over a decade. Gasoline and diesel price hikes were limited to roughly half the formula-driven amount (¥1,160/ton for gasoline and ¥1,115/ton for diesel instead of double). This was explicitly to “reduce the burden” on 300 million drivers and stabilize the economy amid the global spike.
Direct diplomacy with Iran and calls for de-escalation. Early March: High-level talks pressing Tehran to allow safe passage for Chinese (and Qatari LNG) tankers through Hormuz. Ongoing: Repeated public urging of all parties (including US/Israel) to halt military operations, avoid “uncontrollable” escalation, and ensure stable energy flows. China has positioned itself as a neutral mediator (special envoy dispatched) while condemning US-Israel strikes as illegal. Recent incidents (March 27) saw Chinese-flagged container ships turned back despite assurances, highlighting limits of diplomacy. No confirmed new naval deployment for protection during the crisis.
Longer-term resilience focus. Emphasis on diversification, domestic exploration, and accelerating the green energy/EV transition as a structural hedge. No military involvement or futures-market interventions announced.
Japan has taken more aggressive, visible, and collective action (heavy reserve releases + IEA alignment) because of its extreme dependence on seaborne Middle East oil. China’s strategy is more self-reliant and low-profile – leveraging enormous buffers built up in advance, direct leverage with Iran, and domestic price regulation – reflecting its greater size, diversification, and non-IEA status. Both are mitigating consumer pain through price controls, but China’s reserves give it more runway if the Hormuz disruption persists. Officials in both countries warn of prolonged economic ripple effects (inflation, supply-chain issues) if the crisis is not resolved soon.
/X/