Japan's oil import costs increased by 58.7% last month compared to the previous year, while the volume of imports only grew by 3.6%. This rise in costs has made Japan's total import expenses 28% higher and has continued the country's trade deficit for the fourth consecutive month.
Forecast for Further Increases in Oil Costs
Experts at the Daiwa Research Center predict that Japan's oil import costs will see further increases starting from September. This rise in costs is likely due to rising oil prices following heightened tensions in the Persian Gulf and the expansion of conflicts into the Red Sea, particularly with the repeated attacks by Yemen's Houthis on Saudi Arabia's energy infrastructure.
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Trade Deficit and Record Costs
For August, Japan recorded a trade deficit of $7.12 billion, slightly higher than analysts' forecasts and the highest record in the country's history. It is also expected that total import costs for August have increased by 26.3% compared to the previous year. Japan's total imports in this month have broken the previous record set in July, where oil import costs had risen by 87.8%.
Japan is heavily reliant on energy imports, sourcing about 90% of its crude oil from the Middle East. However, since the onset of the war between the United States and Israel with Iran in late February, the country has been rapidly diversifying its energy sources, purchasing crude oil from countries such as Nigeria, Angola, South Sudan, Azerbaijan, the United States, and Canada. Additionally, the country has begun a gradual release from its oil reserves to ensure sufficient supply.
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