The Iran conflict severely impacts Japan through disrupted Hormuz shipping, energy price spikes, and economic strain. Tokyo faces pressure to participate in U.S.-led maritime security amid domestic opposition and legal limits. Longer term, the crisis accelerates Japan’s nuclear energy push, deepens U.S.-Japan energy ties, and diverts U.S. focus from Indo-Pacific.
After weeks of mounting tensions, the United States and Israel attacked Iran on February 28, 2026, mounting a massive assault that targeted military assets and killed Iranian Supreme Leader Ayatollah Ali Khamenei. The attack triggered retaliatory strikes by Iran against multiple targets in the Middle East and the effective closure of the Strait of Hormuz, through which roughly 20 percent of the global oil and liquefied natural gas (LNG) supply transits. The conflict has quickly expanded to encompass the entire Middle East region and has significant implications for the rest of the world, including in Japan. A poll conducted by Asahi Shimbun on March 14–15 showed that 90 percent of respondents were somewhat or greatly anxious about the conflict’s impact on the Japanese economy.
During the first three weeks after the start of the hostilities, there have already been direct and immediate effects on Japan in terms of energy, shipping, and economics. As the conflict persists, it is likely that Japan will also have to cope with a more complex set of implications. Questions are already being raised about Japan’s potential participation in the conflict, which may serve as a test of the security policy reforms that Tokyo has undertaken over the past decade. Depending on how long and in what manner the conflict continues, it may also have broader implications related to the future of Japanese economic and energy policy, the diplomatic leverage of energy exporters such as Russia and the United States, the Indo-Pacific security environment, and the rules-based international order.
Immediate Impacts: Energy, Shipping, and Economics
No Japanese industry is more directly exposed to the war than energy. Japan is reliant on imports to meet more than 85 percent of its energy consumption. In particular, Japan heavily depends on Middle Eastern supplies of oil. Last year, the region accounted for 94 percent of Japanese crude oil imports—including the United Arab Emirates (43 percent) and Saudi Arabia (39 percent)—despite its multi-decade efforts to reduce reliance following the Arab oil embargoes of the 1970s. Japan has had relatively more success in diversifying its imports of LNG; over the decade, the share imported from the Middle East has declined from 29 percent in 2013 to about 11 percent in 2025. Figure 1 illustrates Japan’s sources of crude oil and LNG imports, including its dependence on the Middle East and the Strait of Hormuz.
The Strait of Hormuz is the only sea route that can move oil, natural gas, and other cargo out of the Persian Gulf, including 93 percent of Japan’s oil imports, so the de facto closure of the strait prompted a swift response from Tokyo. On March 16, the Japanese government began releasing 80 million barrels of oil—equivalent to 45 days of domestic oil demand—to mitigate panic and minimize economic toll. Japan likely has one of the largest buffers in the world, with 470 million barrels of oil stockpiled: 254 days’ worth of the domestic demand, comprised of 146 days in the national stockpile, 101 days in mandatory private stockpiles, and 7 days in a reserve program with Middle Eastern oil producers. As of March 2026, Japanese companies also have 4 million tons of LNG inventories, equivalent to roughly 3 weeks of total consumption or the total volume of Hormuz-dependent LNG imports. However, despite these stockpiles, Japan faces fierce competition over limited global LNG and crude oil supply and must cope with the resultant price increases.
Since the conflict began, shipping through the Strait of Hormuz has almost entirely halted, including traffic by Japanese owned and operated tankers and cargo vessels (see Figure 2). According to data from Starboard and the CSIS Asia Maritime Transparency Initiative, the sole exception was a Philippine-flagged and owned ship operated by Japan’s Nisshin Shipping Company, which passed through on March 2 in the early stage of the conflict. This data shows that 28 Japanese owned and operated tankers and cargo vessels were stranded around the Persian Gulf as of March 13 (see Figure 3). Since the conflict began, at least a dozen cargo vessels and oil tankers have been damaged, including a Japanese-flagged container ship owned by Mitsui OSK Lines, which was struck by an unknown projectile while at anchor about 97 kilometers from the Strait of Hormuz on March 11.
The Iran conflict is already inflicting economic pain on Japanese companies inside and outside the Middle East. The cost of shipping has dramatically increased since the conflict started. Insurance companies have increased coverage fees, while ship owners have raised chartering fees to reflect the security risks of maritime shipping in the region. For example, Very Large Crude Carriers chartering costs are over six times their five-year average since February 28. At least 440 Japanese companies are present in the Middle East, and a few major Japanese companies have significant investments or projects across the region related to oil and gas production, petrochemical manufacturing, and LNG exports. Even after the conflict ceases, regional instability could affect the business environment in the region. A wide range of Japanese companies outside the Middle East will also be acutely affected by rising fuel and raw material costs, including airline operators, glassmakers, tire makers, chemical and power companies, and shipping groups.
More generally, the conflict is straining the health of a Japanese economy that is already under pressure from inflation, high prices, and the weak yen. As it continues, the conflict is likely to further push up fuel costs, electricity price, and food prices, and threaten recent gains in real wages. Stocks have slumped in the aftermath of the conflict. Net sales by foreign investors in the Japanese stock market reached the highest level in around five months, marking the end of a strong net buying trend that started at the beginning of 2026. The yen weakened to levels not seen in about 20 months, with Finance Minister Satsuki Katayama commenting that currency intervention is on the table due to the “significant volatility” in financial markets.
Thus far, the Japanese government has taken steps to try to stabilize and assess the situation, calling for diplomatic de-escalation while working to ensure the safety of Japanese nationals in the region through evacuations and travel advisory warnings. Speaking on March 2, Prime Minister Sanae Takaichi said that Japan would make every necessary diplomatic effort with the international community to help calm the situation, urging Iran to cease attacks on neighboring countries and its development of nuclear weapons while also calling for a diplomatic solution. Foreign Minister Toshimitsu Motegi asked the Iranian ambassador to ensure safety in the Strait of Hormuz, and he has since repeated this request to his Iranian counterpart. Japan’s Ministry of Economy, Trade, and Industry has set up a task force to assess the war’s impact on the energy supply and formulate necessary measures.
Broader Implications
Aside from these direct and immediate effects, the Iran conflict will have broader implications for Japan as it continues, several of which are already becoming clear. First, the conflict is raising questions about the degree to which Japan can and should be involved, suggesting that it may serve as a potential test of the security reforms that Tokyo has made over the past decade to enable the exercise of limited collective self-defense. On March 14, President Donald Trump called on Japan and other countries to help escort tankers through the Strait of Hormuz, though he later walked back this idea. On March 16, U.S. Defense Secretary Pete Hegseth asked Japan to endorse a “maritime task force” to safeguard waters. It is possible that the Japan Self-Defense Forces could provide assistance in the Middle East such as escorts, logistics, minesweeping operations, or surveillance aircraft, but while Japan has engaged in such activities in the past, it is very difficult to do so in an active conflict zone. In addition, it is possible that the United States may seek Japan’s help with missile production, which has also been enabled by security reforms implemented over the past decade; Japan has already manufactured and exported Patriot missiles to replenish stocks of U.S. missiles depleted in support of Ukraine.
However, there are legal and political hurdles to such participation by Japan, and they will require careful consideration by the Japanese government. Japanese government officials have simultaneously signaled these limitations while hedging as to what Tokyo will be able to do. For example, Chief Cabinet Secretary Minoru Kihara stated that while the current state of affairs in the Strait of Hormuz does not constitute a “survival-threatening situation” that would allow Tokyo to exercise its right to collective self-defense, the government was continuing to gather information “with grave concern.” Prime Minister Takaichi initially responded to President Trump’s call for escort assistance by clarifying that Tokyo was not currently planning to deploy Self-Defense Force ships for this purpose, but she also indicated her readiness to discuss the issue with top party officials. President Trump did not press the issue during his meeting with Prime Minister Takaichi in Washington on March 19, but these discussions about Tokyo’s involvement are likely to continue. Current opinion polls from Jiji Press and Asahi Shimbun show that 75–82 percent of Japanese respondents do not support the U.S.-Israel attacks on Iran, so the Japanese government will have to navigate any involvement carefully to avoid provoking public backlash.
Second, beyond the immediate economic effects mentioned previously, a prolonged increased in oil prices will complicate Prime Minister Takaichi’s efforts to implement her policy agenda and revitalize the Japanese economy. Many of Takaichi’s proposed policies require significant financial resources to support fiscal stimulus, public investment in strategic sectors, and increased defense spending. Prior to the conflict, there were already questions about how these initiatives would be funded, and the situation is likely to be even more challenging in the future as increased energy prices heighten the risk of stagflation. Economic issues have been top-of-mind for Japanese voters in recent elections, so the government is under pressure to produce results.
Third, energy concerns will accelerate momentum for expanding the use of nuclear energy in Japan, which has been controversial since the 2011 earthquake, tsunami, and nuclear disaster. In the 7th Strategic Energy Plan, the Japanese government’s triennially updated guiding document most recently released in 2025, Tokyo seeks to maximize the use of nuclear power to help meet the growing power demand from data center operation and general electrification trends. As of March 2026, Japan has 15 nuclear reactors in operation, with three ready for restart, while a few are still under review or idled. This latest energy crisis is likely to amplify the energy and economic security argument for timelier nuclear reactor restarts as well as new builds.
Fourth, the Middle East conflict will transfer income and diplomatic leverage to energy exporters outside the Gulf, including Russia. For example, on March 12, the U.S. government temporarily lifted sanctions on Russian oil that was currently at sea in an attempt to curb energy prices, marking the first change in its policy since Moscow’s full-scale invasion of Ukraine in 2022. While Japan has reduced its reliance on Russian oil and gas since 2022, Tokyo has also stressed to Washington the energy security value of Russian LNG, which accounts for about a tenth of Japan’s gas import mix, successfully obtaining waiver renewals from the U.S. Treasury Department. As other countries consider how to mitigate their energy security concerns in the wake of conflict in the Middle East, it may have important consequences for Russia and the war in Ukraine as well.
Besides Russia, the United States also stands to gain leverage from the current conflict. Today, the United States is the largest exporter of oil and LNG in the world, with its LNG export capacity bound to double by 2030. U.S. supplies are not dependent on the Strait of Hormuz, so they provide Japan with the benefit of transit route diversification. At her meeting with President Trump on March 19, Prime Minister Takaichi proposed a joint project to stockpile U.S. crude oil in Japan. For its part, the Trump administration has sought greater energy economic engagement with Japan through investments in U.S. energy projects, as exemplified by energy’s prominence in a series of bilateral documents and negotiations since last summer. The current Iran conflict will further drive U.S.-Japan energy security cooperation, and it may also generate tailwinds for Japanese investment in the often-discussed Alaskan LNG project, which the United States sees as a geopolitical play given its proximity to Russia and China.
Fifth, the Middle East conflict will influence the international security environment and the rules-based international order in ways that have important consequences for Japan. The United States has already shifted attention and resources away from the Indo-Pacific to the Middle East to deal with the conflict, including Patriot missiles and interceptors from the Terminal High Altitude Area Defense system in South Korea, as well as the USS Tripoli and more than 2,200 U.S. Marines previously based in Japan’s Okinawa prefecture. The longer the Middle East conflict persists, the greater the challenges it poses to simultaneously dealing with security concerns related to China, Russia, and North Korea that Japan and the United States face in the Indo-Pacific. It may also lead to more far-reaching deterioration of the global security environment, including through a resurgence of terrorism. Moreover, although Japan has refrained from commenting on the legality of the attacks by the United States and Iran, many experts have argued that the attacks violate international law and weaken the already strained rules-based international order, which is seen as essential to Japan’s national prosperity and security.
Conclusion
During the initial three weeks since the beginning of the Iran conflict, the first-order impacts on Japan’s energy security and economy are already becoming apparent. Moving forward, much depends on the scale and duration of the conflict, but the second- and third-order effects of the conflict will undoubtedly have consequences for Japan as a country that is highly dependent on imported energy and the global economy, as well on its military alliance with the United States. When viewed in light of other sources of increasing uncertainty in the international environment and the hurdles facing the Japanese economy, it is clear that there will be many challenges for Tokyo to navigate in the days ahead.