Japan PM Warns Iran War Oil Crisis Hitting Asia-Pacific Hard
Adam Hancock
Japan's Prime Minister Sanae Takaichi warned that the Iran war-driven oil crisis is severely impacting the Asia-Pacific region, as the Strait of Hormuz's near-closure disrupts energy supplies. During a visit to Australia, she announced energy and strategic minerals cooperation deals.
Japan's Prime Minister Sanae Takaichi warned on May 4 of the severe impact of the oil crisis caused by the Iran war on the Asia-Pacific region. Speaking during a visit to Australia, she stressed that the blockade of the Strait of Hormuz is heavily affecting energy supply chains.
Around one-fifth of the world's crude oil and liquefied natural gas (LNG) typically passes through the Strait of Hormuz. However, since the US and Israel attacked Iran on February 28, shipping through this strategic waterway has been virtually paralyzed. According to the International Energy Agency (IEA), 80% of the oil transiting the strait is destined for Asia.
“The virtual closure of the Strait of Hormuz has had an enormous impact on the Indo-Pacific region,” Prime Minister Takaichi said. “We affirm that Japan and Australia will closely consult with each other and respond with a sense of urgency.” Australia currently supplies about one-third of Japan's energy needs and is its largest LNG export market.
Both Canberra and Tokyo are seeking to shore up energy supplies amid the Iran war. Australian Prime Minister Anthony Albanese said: “Like Japan, we are very concerned about disruptions to the supply of liquid fuels and refined petroleum products.”
Military and Strategic Minerals Cooperation
On the first day of a three-day visit to Australia, Prime Minister Takaichi and Prime Minister Albanese issued a series of joint commitments on energy, economic, defense, and strategic minerals cooperation.
Australia announced it would provide up to A$1.3 billion (about US$937 million) for strategic minerals projects involving Japan, potentially supplying Japan with resources such as gallium, nickel, graphite, rare earths, and fluorite.
The Japanese government expressed a desire to secure stable supplies of strategic minerals, essential for semiconductor production, electric vehicle batteries, and weapons systems.
Australia and Japan, both close US allies, have bolstered military cooperation in recent years due to shared concerns over changes in the regional security environment, particularly China's growing influence. Last month, the two countries announced a A$10 billion (about US$7 billion) deal for Japan to supply Mogami-class stealth frigates to the Australian navy.
