Japan is urging Saudi Arabia and other oil producing nations to increase supplies to stabilize the global oil market, the chief cabinet secretary said on Oct. 19 as rising fuel prices amid the Israel-Hamas conflict threaten to impact the global economy.

Japan, the world's fourth-largest crude buyer, imported 2.70 MMbbl/d last year, of which over 90% came from the Middle East. Saudi Arabia, the United Arab Emirates and Kuwait are its main suppliers.

Israel has started a massive military assault on Gaza after Hamas attacked Israel on Oct. 7, killing hundreds, and the conflict has put Japan, a U.S. ally, in a delicate diplomatic position given its dependence on the Middle Eastern fuels.

"Government of Japan will urge oil producing countries to stabilize the global crude oil market by increasing production and investing in production capacity," Hirokazu Matsuno, chief cabinet secretary, told reporters.

Benchmark Brent crude oil futures have jumped by over $5/bbl since the conflict began, but they eased on Oct. 19 after the Organization of the Petroleum Exporting Countries indicated it did not plan to immediately act on OPEC member Iran's call for an oil embargo on Israel.

Japanese Prime Minister Fumio Kishida-who who visited Gulf countries in July-spoke to Saudi Crown Prince Mohammed bin Salman on Oct. 18 about improving humanitarian conditions in Gaza and helping to ease tensions.

Matsuno said Kishida and the Saudi crown prince did not discuss stabilization of the crude oil market but added: "I am requesting relevant countries, including Saudi Arabia, to seize various opportunities and play a leading role in stabilizing the global crude oil market, including further increasing production."

Japan is a member of the International Energy Agency, and has in the past released oil reserves to meet major supply disruptions. It last did so in 2022 in the wake of the Russian invasion of Ukraine.

Comments