The de facto blockade of the Strait of Hormuz has once again exposed the vulnerability of Japan’s energy supply. The response going forward will require a review of institutional design, including the government’s role, rather than relying solely on company-led diversification.
The blockade of the Strait of Hormuz has highlighted the vulnerability of Japan’s energy supply, prompting calls to consider future responses in light of this crisis. Hosokawa Masahiko (細川昌彦), a special adviser to the Cabinet Secretariat and professor at Meisei University, called for institutional design that incorporates not only costs but also risks.
Following past oil crises, Japan diversified its sources of oil imports, changing its dependence on the Middle East from around 80% to the 60% range. It was noted, however, that dependence subsequently rose again. The slowdown in growth in the countries Japan had diversified into was also a factor.
The fundamental structural problem is that there is insufficient scope for a system in which diversification is pursued based solely on companies’ management decisions. In light of this event, the view was expressed that the government should take the lead in pursuing fundamental reform.