Japan Secures UAE Oil Route Via Fujairah, Avoiding Strait Of Hormuz Risks

Japan secured an alternative oil supply route via the United Arab Emirates to bypass the Strait of Hormuz, with the Japanese government reaching an agreement to secure an additional supply of 20 million barrels of crude oil through a route that avoids the chokepoint.

The shipment is to be transported via the port of Fujairah, located in the Gulf of Oman and connected by pipeline to oil fields in the UAE, according to AzerNews citing Nikkei newspaper.

@coindesk

At a press conference in Paris, Japan’s Minister of Economy, Trade and Industry Yoji Muto Akazawa said the UAE and Saudi Arabia had pledged to maintain stable oil supplies despite potential disruptions in the Strait of Hormuz.

The route is designed to avoid passage through the strategically sensitive Strait of Hormuz, where maritime risks have recently increased, and Fujairah port has previously been targeted in drone attacks attributed to Iran.

Japan also moved to protect energy supplies by seeking UAE stockpile support as the Strait of Hormuz remained closed, with Economy, Trade and Industry Minister Ryosei Akazawa telling reporters in Paris, “We want to significantly increase the joint stockpiles with the UAE.”

Akazawa said the UAE promised to replenish crude oil already released and to expand the stockpiles further, and he added that crude oil from the UAE makes up about 40 per cent of Japan’s total crude oil imports.

Al Jazeera

The UAE withdrew from the Organisation of the Petroleum Exporting Countries on Friday and plans to gradually raise production at its own discretion, while Akazawa held talks in Saudi Arabia with Saudi Foreign Minister Prince Faisal bin Farhan on Monday.

In parallel, United24 Media said a tanker carrying Russian crude oil docked at a refinery in western Japan, with the shipment received by Japanese refiner Taiyo Oil at its facility in Imabari, Ehime Prefecture, and unloading beginning on May 6 for processing into gasoline and other petroleum products.

The longer-term business impact is tied to how quickly supply chains can recover after Hormuz disruptions, with The New York Times describing that “This month-long journey cannot be meaningfully sped up.”

It said that once oil reaches land, refining, loading and transit speeds are constrained by existing infrastructure, and that in countries with less developed refining, port or pipeline infrastructure, getting fuel to consumers can take even longer.

The New York Times also warned that even once the Strait of Hormuz fully reopens, it may take months for shipping to return to normal, with hundreds of tankers trapped or diverted and insurance premiums making some voyages economically unviable.

In March, the Philippines declared a national emergency because of disruptions in oil supplies, and the article said much of Asia is grappling with shortages of petroleum-derived goods like plastics, adhesives and paints.

Separately, United24 Media said roughly 95% of Japan’s oil imports traditionally come from the region and that approximately one-fifth of global oil shipments normally pass through the strait, underscoring the scale of the exposure.