2023 Research and Study
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- publication date:2026/03/31
“Surveying the Situation in Iran: A Middle East–Eurasia Perspective （6）” The Impact of Iranian Attacks on the Chaotic Middle East Energy Situation: With a Focus on the Impact on Japan
MEIJ Commentary No.17
“Surveying the Situation in Iran: A Middle East–Eurasia Perspective （6）”
Following the U.S.-Israeli attack on Iran on February 28, 2026, and Iran’s subsequent retaliatory strikes, tensions in the Middle East have escalated further. In response to these developments, this commentary series, titled Surveying the Situation in Iran: A Middle East–Eurasia Perspective, brings together analyses by members of the study group, each examining the current situation from the standpoint of their own regional and disciplinary expertise, while considering its background and implications.
The Impact of Iranian Attacks on the Chaotic Middle East Energy Situation: With a Focus on the Impact on Japan
Masahide TAKAHASHI,
Middle East Institute of Japan, Senior Research Fellow
Following the surprise attack on Iran by the United States and Israel on February 28, 2026, Iran has intensified its military activities in the Persian Gulf region. Amidst this situation, concerns are mounting that the turmoil in this region—one of the world's leading producers of oil and natural gas—could severely impact the global energy situation.
Impassable Strait of Hormuz
Following a sudden change in the situation in Iran, the Strait of Hormuz, through which vast quantities of oil and liquefied natural gas (LNG) pass daily, has effectively been blockaded. On March 2, the Iranian Revolutionary Guard announced that it had closed the Strait of Hormuz, a vital energy transport route, and warned vessels attempting to traverse the strait of dire consequences. On the same day, multiple marine insurance companies (including P&I Clubs such as Guard, Skuld, North Standard, London P&I Club, and American Club) announced the suspension of war risk coverage for vessels navigating the Gulf region, citing the sudden change in the situation in Iran. The areas excluded from war risk coverage expanded beyond Iranian territorial waters to include the Persian Gulf and surrounding waters.
Against the backdrop of Iranian threats to vessels, the surge in marine insurance premiums, and the suspension of coverage, many shipping and trading companies are currently avoiding rerouting away from the Strait of Hormuz. As a result, the number of vessels transiting the Strait plummeted from 95 on February 27, the day before the Iranian attack, to just 4 by March 5.
Figure 1: Number of Vessels Transiting the Strait of Hormuz
(Source) Based on IMF PortWatch
Constraints of Crude Oil Pipelines Bypassing the Strait of Hormuz
The Strait of Hormuz, located between Oman and Iran, is a vital maritime route connecting the Persian Gulf, the Gulf of Oman, and the Arabian Sea. It is also a crucial chokepoint for maritime traffic, with sufficient depth and width to accommodate the world's largest crude oil tankers. In 2024, crude oil throughput via the Strait of Hormuz reached 14.2 million barrels per day (bpd), with petroleum products at approximately 5.9 million bpd. This represents over 25% of global seaborne oil shipments and approximately 20% of global oil consumption. Regarding natural gas, LNG trade via the Strait accounts for approximately 20% of the global total (Source: EIA).
On the other hand, alternative routes that can bypass the Strait of Hormuz are limited. First, Saudi Arabia has the East–West Oil Pipeline, which is approximately 1,200 kilometers (km) long (transport capacity 5-7 million bpd) and connects the eastern oil fields of Abqaiq to the western Red Sea port city of Yanbu. In addition, the UAE has an oil pipeline (transport capacity 1.5-1.8 million barrels) stretching approximately 360 km from the oil fields in the Habbashan region of Abu Dhabi Emirate to the port city of Fujairah, located on the Indian Ocean side of the Strait of Hormuz. Iran also has an approximately 1,100-kilometer-long oil pipeline (transport capacity: 1 million bpd) that connects Ghorre in Bushehr Province to the newly established Jask oil export terminal in 2021. However, considering the constraints on the pipeline transport capacity of both Saudi Arabia and the UAE (combined capacity of 6.5 to 8.7 million bpd), excluding Iran, it would be difficult to cover the entire volume of oil passing through the Strait of Hormuz under conditions of an effective blockade.
Attacks on energy-related facilities
As Iran intensifies its attacks on Gulf nations, damage to energy-related facilities has also been confirmed. Targets included the Ras Tanura refinery in eastern Saudi Arabia (March 2), LNG-related infrastructure in Qatar (same date), fuel tanks at Oman's Duqm Port (March 3), fuel tanks at Fujairah Port in the UAE's eastern region (same date), and Bahrain's Sitra refinery (March 5).
These attacks on energy facilities have forced some Gulf nations to halt oil and natural gas production. State-owned Qatar Energy announced on March 2 that it had suspended LNG and related product production after its operational facilities in Ras Laffan Industrial City and Mesaieed Industrial City were targeted by military attacks. As Qatar is one of the world's leading LNG exporters, this issue is of great concern. Its 2024 export volume of 78 million tons accounted for approximately 19% of global exports, ranking third behind the United States and Australia (Source: GIIGNL). Qatar is currently advancing an expansion plan for the North Field (North Dome) gas field offshore the Qatar Peninsula, with the aim of increasing its annual LNG production capacity from the current 77 million tons to 142 million tons. Some view Qatar as possessing an influence comparable to that of Saudi Arabia, which dominates the international oil market, owing to its potential to significantly impact the global gas market through gas supply. A prolonged halt in Qatar's LNG exports could cause international gas prices to surge and inflict economic damage on countries importing Qatari LNG.
Regarding oil production, Kuwait Petroleum Corporation (KPC) declared force majeure on March 7, citing attacks by Iran and constraints on oil storage capacity, choosing to proceed with oil production cuts. Furthermore, according to a March 8 Reuters article, Iraq's oil output has plummeted by about 70%, from approximately 4.3 million bpd before the conflict to around 1.3 million bpd. This decline stems from difficulties in exporting crude oil via the Strait of Hormuz from major oilfields in southern Iraq.
International crude oil prices have surged sharply because of the suspension of shipping through the Strait of Hormuz, attacks on energy facilities, and production cuts by Middle Eastern oil-producing countries. The price of Brent crude oil, a key benchmark, increased from $72 per barrel on February 27 to $110 per barrel on March 9.
Figure 2: Brent Crude Oil Price Trends
(Source) Created based on Trading Economics
Impact on Japan's energy procurement and economy
The closure of the Strait of Hormuz poses a significant concern for Japan's energy procurement. Having aligned with Western nations to curtail imports of Russian crude oil in 2022, Japan now imports nearly all of its crude oil from Gulf oil-producing nations. The country’s dependence on Middle Eastern crude oil is projected to reach approximately 94% by 2025, with imports via the Strait of Hormuz accounting for 90% of this volume. Even if Japan can manage this in the short term by releasing strategic oil reserves, soaring crude oil prices combined with a weak yen are highly likely to significantly increase domestic fuel prices in the medium to long term.
Regarding natural gas, Japan imports the majority of its LNG from outside the Middle East (primarily Australia, Malaysia, Russia, and the United States). Imports of Qatari and UAE LNG transiting the Strait of Hormuz are projected to be only about 4 million tons (roughly 6% of total imports) by 2025. Even adding Omani LNG (3.3 million tons), sourced from the Indian Ocean side of the Strait, Middle Eastern LNG accounts for only 11% of Japan's total. However, if Qatar cannot continue LNG exports because of difficulties in navigating the Strait of Hormuz, global LNG supply and demand could be severely disrupted, potentially causing spot prices to surge. The “JKM,” a spot price benchmark for LNG destined for Japan and South Korea, rose from $10 per million British thermal units (BTU) on February 27 to $15 on March 6. Furthermore, because many LNG purchase agreements signed by Japanese companies use oil-linked price indices, rising crude oil prices are likely to increase LNG import costs. Consequently, the increased fuel procurement costs could lead to higher electricity rates in Japan.
(Written in March 9, 2026)
