Japan urged to find substitute sea lane for oil imports

Policy advisers for the Japanese prime minister's office have warned of possible future disruptions to tanker traffic in its key Asian sea lane with heightened regional tensions surrounding China, recommending the government secure an alternative route to ensure its oil and LNG imports.

The councilors' meeting for the premier's ocean policy headquarters earlier this week submitted a set of policy proposals to premier Yoshihide Suga ahead of budget talks expected to begin within a few months for the April 2022-March 2023 fiscal year. This year's recommendations focused on proposed actions to counter China's growing maritime presence, alerted by a record level of activity by China's coastguard vessels in and near Japan's territorial waters in the East China Sea and increased military activity in the South China Sea.

"This poses not only a threat to security of our territorial and exclusive economic waters and maritime interests but a greater risk to our steady use of a crucial sea lane that is the main route for our energy and goods imports," the recommendations report said.

Japan continues to heavily rely on crude imports from the Middle East, which accounted for 92pc of the total 2.5mn b/d of imports last year. The bulk of the supplies cross the strait of Malacca, travels through the South China Sea, and either the Taiwan strait or Bashi channel before arriving in Japan. The country also imported 12mn t, or 16pc of its total LNG supplies, from the Middle East in 2020.

The advisers urged the government to continue promoting a strategy to ensure a free and open Indo-Pacific region as well as safety and stability of key sea lanes in Asia, while making efforts to secure an alternative sea route and work out a contingency scenario to ensure energy supply stability via utilisation of stockpiling and deployment of commercial fleets.

Stockpiling safeguard

Tokyo is targeting to strengthen co-operation with Asian countries on a crude stockpiling programme in efforts to avoid geopolitical risks that could arise from its heavy Middle East oil reliance.

Japan last year signed a joint oil stockpiling deal with Kuwait's state-owned KPC for a 3mn bl storage capacity in Japan. This is the first deal that provides Asian countries, particularly southeast Asian countries, with emergency supplies if needed, while also giving Japan access to stored crude in an emergency.

The policy advisers also called for participation by Japan in international arctic research programmes and utilisation of a new arctic research vessel, as part of efforts to boost national interest and a presence in the region. Japan in 2015 enforced its first arctic development policy, joining the race for access to the region's vast sub-sea energy resources and shipping routes. The government is targeting to launch a new LNG-fuelled arctic research ice-breaker vessel in 2026.

Japan's ocean policy was last revised in 2018. The recommendations are expected to be incorporated in budget proposals for 2022-23.

By Rieko Suda