The Japanese government is preparing to introduce legislation aimed at diversifying the country’s crude oil supply routes to reduce reliance on the Strait of Hormuz. The proposed measures, which include three separate bills, are set to be submitted to an extraordinary Diet session by the end of October after review by a ruling coalition subcommittee.

Central to the plan is the establishment of a subsidy system to offset additional costs faced by crude oil importers when sourcing supplies through alternative, often more expensive, routes that bypass the Strait of Hormuz. Historically, over 90% of Japan’s crude oil imports have passed through this strategically sensitive waterway. By reimbursing importers for some of these heightened expenses, the government aims to encourage the use of alternative procurement channels.

Alongside the subsidy framework, one bill addresses crude oil transportation insurance. It proposes a government-backed mechanism to cover part of insurance claims for damage to oil tankers and other transport vessels in cases where private insurers are unable to provide reinsurance amid rising international tensions. This move seeks to mitigate risks associated with transporting oil along less conventional routes.

The third legislative proposal involves amending the Japan Organization for Metals and Energy Security (JOGMEC) Law. The amendment would empower JOGMEC to invest in infrastructure projects, including the development of pipelines necessary to establish reliable alternative supply routes.

In response to recent disruptions linked to conflict-induced blockades near the Strait of Hormuz, Japan has already shifted some of its crude oil imports from the Middle East to suppliers in regions such as North America. Additionally, it has utilized pipeline routes that circumvent the strait to maintain energy supplies.

Through these legislative efforts, the government intends to strengthen the resilience of Japan’s crude oil imports by securing transportation routes less vulnerable to geopolitical instability. The measures reflect a strategic priority to safeguard energy security amid ongoing uncertainties in the Middle East and elsewhere.