Japan‘s oil dependence has historically been maintained for most of its energy needs and almost all of its oil is imported, mostly from the Middle East.

Oil price movements therefore have a major impact on the national economy.

The price of oil has fluctuated significantly in recent years, reaching approximately 75,000 yen per kilogram in January 2014, then falling below 37,000 yen per kilogram in February 2015, and rising again to approximately 50,000 yen per kilogram in June 2015.

In the first quarter of 2016, the oil price fell below 30,000 yen per kilogram due to oversupply and uncertainty about the Chinese economy.

After the first quarter, the oil price began to increase due to the slight recovery of the global economy and OPEC‘s agreement to reduce production.

Although the oil price declined significantly shortly after the outbreak of the Covid-19 pandemic in 2020, below ¥20,000 per kilo-liter in May 2020, it has risen steadily since then as the global economy has gradually recovered from the impact of the pandemic.

Oil dependence

Recently, the price of oil has risen sharply to ¥95,880 per kilogram in June 2022, partly due to the conflict between Russia and Ukraine and the resulting oil supply disruption.

According to its own government, Japan has worked to reduce its oil dependence by encouraging energy conservation and the use of alternative fuels.

In addition, the restructuring of industry, with a shift in emphasis from primary to processing and assembly-type industries and from manufacturing to service industries, has also contributed to the reduction in oil consumption.

Since fiscal 2011, due largely to the effects of the earthquake, the import of oil and natural gas as alternatives to nuclear power increased significantly as demand for power generation at thermal power plants increased.

Japan has a highly advanced and diversified economy, which has developed in response to changing conditions in Japan and the world.