When Saudi Arabia suddenly announced in early April that it would reduce its oil production by 500,000 barrels per day (bpd), followed shortly thereafter by several other OPEC+ members, bringing the total cut to 1.1 million bpd, Japan was greatly concerned. In spite of Japan’s serious efforts to work toward a carbon-neutral society, the country is still heavily dependent on oil, which accounted for 36.3% of its total energy consumption in FY2021 (April 2021-March 2022). Additionally, since the Russian invasion of Ukraine in early 2022, Japan has become overwhelmingly dependent on the Persian Gulf for its oil, relying on the region for over 95% of its supplies. It is of vital interest for Japan to maintain a stable and uninterrupted flow of oil from the Persian Gulf region.
Iran and Saudi Arabia: Japan’s two key energy suppliers
Traditionally, Japanese oil security policy has been focused on two major countries in the Persian Gulf region: Iran and Saudi Arabia. Japan has maintained a relatively good relationship with Iran compared to Western countries, even after the Islamic Revolution in 1979. This is because Japan has no negative legacy of colonialism in Iran, as well as a record of resisting U.S. pressure to cut Japanese-Iranian economic ties. It should be noted that there were several cases where Japan and the U.S. “agreed to disagree” on Iran, like the Japanese yen loan to the Masjid E. Soleiman Hydroelectric Power Project and the Azadegan oilfield concession.
Japan is one of the U.S.’s closest allies and as such, Japanese opposition to the U.S. when it comes to business is very rare. But the growing tension over Iran’s nuclear program after 2002 has made it much more difficult for Japan to maintain its economic relationship with Iran. In the 1970s and 1980s, Iranian producers had a 30% share of Japanese oil imports, and they even maintained a share of around 10% at the peak of the Iranian nuclear crisis. However, Japan finally gave up importing Iranian oil after the Trump administration resumed its unilateral sanctions against Iran under the “maximum pressure” campaign.
Japan has also been making pointed efforts to maintain a good relationship with Saudi Arabia for decades. The kingdom has long been a major oil exporter to Japan and now holds the largest single share, accounting for 43.4% of total oil imports as of February 2023. Maintaining a stable relationship with Saudi Arabia has undoubtedly been one of the top priorities for Japan’s energy security policy, and in doing so, Japan has actively supported Saudi nation-building through vocational training and the transfer of technological know-how and resources.
Growing Japanese concerns over the Persian Gulf
The status quo of the energy and security situation in the Persian Gulf has changed recently and Japan now has more to worry about. Since the Trump administration resumed unilateral sanctions against the Islamic Republic in 2018, Iran has been increasing the volume and density of its enriched uranium far beyond what was permitted under the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). Iran has subsequently insisted that it needed to balance against U.S. sanctions.
The Biden administration still seems to be trying to find a diplomatic solution to Iran’s potential nuclearization, although senior U.S. officials recently made it clear that all options are on the table and warned that Iran could stockpile enough enriched, weapons-grade uranium for an atomic bomb in 12 days. The wild card in this situation is Israel, which has been actively opposing Iran’s nuclear program through various forms of sabotage, although these actions have failed to stop it. If Iranian nuclearization is imminent, Israel would be obliged to take more direct action to incapacitate Tehran’s nuclear facilities.
The gap between the Biden administration and Saudi Arabia seems to be growing wider as well. Before taking office, then-candidate Joe Biden criticized Saudi Arabia over the killing of journalist Jamal Khashoggi in Istanbul and pledged to treat the kingdom as a “pariah.” The divide between Washington and Riyadh has been attracting more attention since the Saudi-led OPEC+ decided to cut oil production by 2 million bpd last October. This came after President Biden visited Saudi Arabia in July 2022 to ask them to increase output. The March 2023 China-brokered agreement to restore Saudi-Iranian diplomatic relations was another blow to the Biden administration, with CIA Director William Burns expressing Washington’s frustration over the move. No doubt, the latest Saudi-led oil production cut of 1.1 million bpd has further provoked the U.S.
The Chinese mediation between Saudi Arabia and Iran, which could lead to the de-escalation of tensions between the two longtime rivals, should have been welcomed by Tokyo because both countries have been leading oil exporters to Japan. There was even some criticism in Tokyo that Japan should have mediated between Saudi Arabia and Iran itself, instead of China. In fact, Japan, as a country that is heavily dependent on Persian Gulf oil, was alarmed by China’s mediation as it fortified China’s position as a strong regional rival. Although its imports from Russia are increasing rapidly, China remains heavily dependent on Persian Gulf oil, and therefore Beijing has plenty of motivation to try to increase its influence in the Middle East. The same holds true for Japan and its efforts to secure a stable supply of oil from the Persian Gulf.
All of these issues are closely linked to the growing assumption that the U.S. military personnel deployed around the Gulf will eventually leave the region and return to the United States, even though the U.S. insists there is no substantial change in its security commitment to the region. Whether this is true or not, such an assumption is already widespread and broadly accepted. Thus, Saudi Arabia and other Gulf Arab countries are trying to diversify their security partners and become less hesitant about confronting the U.S., while China and Russia may try to fill the power vacuum created by an eventual U.S. redeployment. In other words, the present destabilization in the Persian Gulf has been triggered by the preoccupation with a U.S. withdrawal from the region.
Japan’s energy security and national security clash in the Persian Gulf
As a country that is up to 95% dependent on oil imports from the Persian Gulf, Japan has a strong desire to see a continued U.S. military presence in the region. But the problem for Japan is that the rumored redeployment of U.S. forces would see them reassigned to the Asia-Pacific region. This further complicates matters for Tokyo as it tries to strike a balance between its energy security and national security concerns. For a long time, Japan has put higher priority on energy security than on national security, thanks to decades of U.S. hegemony in the Asia-Pacific region. However, the Japanese people have come to view the continuous expansion of Chinese military power in the region as a potential threat to peace and stability.
Recently, there have been serious debates in Washington, Taipei, and Tokyo, among other cities, as to whether or not China will really try to annex Taiwan in the near future. The closest Japanese island to Taiwan is just 67 miles away, and it is home to the largest U.S. Air Force base in the Asia-Pacific region. If an armed conflict were to occur around Taiwan, Japan would have no other option except to engage to defend itself as well as Western interests.
As Japan depends heavily on oil from the Persian Gulf, the continuous U.S. security commitment to the region is extremely important for Japanese energy security. At the same time, Japan faces growing national security concerns due to China’s military expansion and increasingly assertive attitude in the Asia-Pacific region. In this context, Japan welcomes any additional redeployment of U.S. forces to the Asia-Pacific region, even if they come from the Persian Gulf. In other words, Japan has rather selfish and contradictory demands of the U.S. at present: Firstly, to keep the U.S. military presence in the Persian Gulf region to protect Japanese oil imports, and secondly, to increase the U.S. military presence in the Asia-Pacific region to counter China’s aggressive military expansion and ensure peace and stability. There seems to be no clear-cut answer to this conundrum and some sort of compromise may be necessary.
Finally, while Japan has maintained bilateral economic ties with Iran for decades in spite of U.S. displeasure, that seems to be less possible recently. This change reflects the growing seriousness of the security environment surrounding Japan. Tokyo now needs to rely on the U.S. security commitment more than ever and does not want to provoke the U.S. on issues where Japan can compromise — Iran being one such issue.
Mitsugu Saito is the former Japanese Ambassador to the Islamic Republic of Iran.
Photo by Toru Hanai/Bloomberg via Getty Images
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