Japan’s cabinet approved three bills on Tuesday to strengthen energy security, including a grant program to help fuel importers absorb higher transportation costs when supplies are brought in through routes that avoid chokepoints such as the Strait of Hormuz. The government plans to submit the legislation to parliament during the current extraordinary Diet session.
Industry Minister Ryosei Akazawa said the package is intended to improve supply security by diversifying sources of crude oil and other fossil fuels and reducing related risks. One bill would establish the transport-cost grants, funded by contributions from a broad group of importers, including oil refiners, traders and petrochemical manufacturers.
A second bill would allow the government to cover part of insurance payouts for tankers and other vessels carrying petroleum products and liquefied natural gas if foreign reinsurers withdraw coverage because of heightened geopolitical tensions. The third would expand the Japan Organization for Metals and Energy Security’s ability to invest in infrastructure for alternative supply routes, including pipelines.
The measures follow a disruption in tanker traffic through the Strait of Hormuz that exposed Japan’s dependence on Middle Eastern oil. The disruption pushed importers toward longer and more expensive routes, increasing freight, insurance and procurement costs.
Japan has responded by releasing national crude reserves and arranging alternative supplies. In August, it also unveiled a broader plan to strengthen energy-supply resilience, with the legislative measures expected to be finalized by the end of the year.