War tests Japan’s oil diplomacy

TOKYO (Reuters) – As Tokyo scrambled to respond to Hamas attacks on Israel this month, Japanese officials found themselves debating a perennial fear: what does it mean for the resource-poor nation’s oil lifeline from the Middle East?

Concerns about energy security, as well as Japan’s diverse diplomatic interests in the region, explain why Tokyo initially struck a more neutral tone on the crisis than other Group of Seven (G7) industrialized nations, three government sources with knowledge of the matter said.

While Japan has since adopted bolder rhetoric, its hesitancy may also complicate how Japan brokers a unified stance with its G7 peers, officials and analysts said, as it prepares to host a meeting of the group’s foreign ministers in Tokyo next month, where the spiraling conflict is expected to dominate.

“The situation on the ground is changing minute-by-minute. Japan has been expressing its stance in response to the latest situation each time,” Japan’s Foreign Minister Yoko Kamikawa told a press conference on Wednesday, in response to Reuters’ question on whether Tokyo’s response had been more restrained than its peers.

“Peace and stability in the region is highly important for (Japan’s) energy security. From this viewpoint, Japan is closely watching the situation with serious concern,” she added when asked about Japan’s oil dependence on the Middle East, which supplies more than 90% of its needs.

After Hamas’s heavily armed assailants rampaged through southern Israel on October 7, Israel has responded with bombardments of the Hamas-ruled Gaza enclave, raising the risk of a broader regional war involving Iran, its Lebanese ally Iranproxy Hezbollah, and Syria.

While the conflict has had little impact on global oil and gas supplies as of yet, and Israel is not a significant producer, investors and market observers are assessing how it could escalate and what it might mean for supplies from nearby countries in the world’s top oil producing region.

‘WALKING A FINE LINE’

In the immediate aftermath of the Hamas assault, Japan issued statements condemning the attacks and saying it was concerned by Israeli air attacks in the Gaza Strip.

Japan did not refer to the Hamas attacks as “terrorism” or reference Israel’s right to defend itself – language that had been used by its G7 peers – until October 11.

Prime Minister Fumio Kishida was also not among the five G7 leaders who signed a statement on the crisis on October 9, prompting questions over the unity of the group’s response.

G7 finance ministers, who met in Morocco as events escalated, issued a brief statement on the attacks on October 12.

A government official involved in negotiating that statement, speaking on condition of anonymity, said Japan had been eager to steer clear of any language that could have been seen as provocative.

Japan was “standing one step behind the United States and some European countries,” added Isamu Nakashima, associate research fellow at the Middle East Institute of Japan.

For decades, Japan has tried to steer a neutral course through the Israeli-Palestinian conflict by calling for a negotiated settlement, although it has criticized Israel for allowing the construction of settlements outside the West Bank.

For Tokyo, this approach has been driven by painful memories of the 1973 oil crisis, when Middle East producers issued an embargo targeted at nations, including Japan, that supported Israel during its war with Arab states.

Energy-poor Japan – unlike the US – has since attempted to pursue cordial ties with both Saudi Arabia and Iran, the region’s key rivals and major oil producers.

“The through line of Japan’s Middle East policy has been maintaining the flow of energy imports from the region,” said David Boling, a director at consulting firm Eurasia Group.

“Tokyo will fret over how to respond to this crisis, for fear of somehow jeopardizing that lifeline.”