Japan's July Crude Imports Jump 27.8% as Supply Diversification Gathers Pace
Japan's crude oil imports rose 27.8% year-on-year in July as Canadian and Russian barrels replaced lost Middle Eastern volumes, Reuters reported citing trade data.
Japan's crude oil imports rose 27.8% in July compared with July 2025, Reuters reported, citing government import and export data. The July figure follows June data showing a 25.4% year-on-year increase and a monthly import bill of $89.46 billion, which Reuters, citing government figures, reported as an all-time record.3
Both data points tell the same supply story. Japan historically sourced more than 90% of its crude oil from Middle Eastern producers, and those flows collapsed after the Strait of Hormuz disruptions took hold. Middle Eastern crude arrivals fell 63.7% year-on-year in April (2026-04) and 57.2% in May (2026-05), japan-nrg.com reported.4,5
Japan's largest refiner, Eneos, moved to plug part of the gap. On July 30 (2026-07-30), Reuters reported that Eneos had purchased a cargo of Canadian crude — the first Canadian oil shipment bought by a Japanese company since 2025. The parcel was loaded on an Aframax tanker with a 750,000-barrel capacity, a modest volume but a concrete signal that Japan is now sourcing crude from origins it never previously needed.5
The Trans Mountain pipeline has made that route viable at scale. Operating at double its original capacity of 890,000 barrels per day since 2024, the line has redirected a growing share of Canadian production toward Pacific export terminals. Reuters data show 77% of total oil exports from the Port of Vancouver have gone to Asia since the start of 2026, up from 51% in 2024 when the pipeline began running at expanded capacity. Trans Mountain Corp. has announced plans to potentially expand the system to 1.2 million barrels daily.5
Russia re-entered Japan's crude supply mix earlier this year. Japan stopped importing Russian crude in May 2025 but resumed in January (2026-01), receiving 747,706 barrels from the Sakhalin-2 project, the first delivery since roughly 650,000 barrels arrived in May 2025, S&P Global Platts reported in the week of 2026-05-18. Sakhalin-2 also supplies around 9% of Japan's total LNG imports, making its continuity significant across both commodity streams.1
ICE Brent crude front-month was trading at $94.49 a barrel as of Thursday (2026-08-20), with the JKM LNG benchmark at $22.08 per million British thermal units. Elevated prices across crude and gas have amplified Japan's import cost burden even as the volume recovery progresses.3
Domestic refinery operations have not kept pace. Crude processed at Japanese refineries fell 13.7% year-on-year in April (2026-04), japan-nrg.com reported, as operators cut throughput partly to protect equipment from unfamiliar crude grades arriving to replace the Gulf streams those refineries were configured to process.4
Utilities absorbed the shortfall by burning more coal. Gas-fired power generation in Japan fell 12.9% to 16,447 gigawatt-hours in April (2026-04), Reuters reported, while coal-fired output rose 11.1%, the fastest annual increase in at least a year. Bloomberg reported Japan generated 17.3 terawatt-hours from gas-fired plants in June (2026-06), still down year-on-year despite some improvement in LNG arrival volumes.2,6
The global demand outlook has softened. On August 13 (2026-08-13), the IEA projected a 1.6 million-barrel-per-day contraction in global oil demand for 2026, a forecast 510,000 barrels per day below its previous monthly estimate, while OPEC trimmed its demand-growth projection to 580,000 barrels per day. ICE Brent front-month fell 42 cents to $88.56 a barrel that session, ibtimes.sg reported, before recovering to $94.49 as of Thursday (2026-08-20).7
Japan's import surge is supply-driven rather than demand-driven: the country is buying more crude because it must, not because refinery throughput or domestic consumption has recovered. The pace at which Japanese refiners can increase processing runs on non-Middle Eastern grades, and how quickly Trans Mountain volumes can scale if Hormuz remains constrained through winter, are the two variables that will shape Japan's crude import bill in the months ahead.4,5