Japan’s Oil Import Bill Soars 59% as Trade Deficit Deepens

Japan's energy import bill surged sharply in August, with spending on crude oil rising far faster than volumes, according to reporting by Oilprice.com. While oil shipments into the country grew by a modest 3.6% year-on-year, the cost of those imports jumped 58.7%, lifting the nation's overall import bill by about 28% and extending a trade deficit into its fourth month. The shortfall for August reached $7.12 billion, the highest on record and slightly above analyst expectations. Forecasters had anticipated the total import bill would climb about 26.3% year-on-year; the actual increase exceeded that prediction and also topped the previous monthly record set in July, when oil import spending surged 87.8%. Market analysts point to rising crude prices tied to escalating tensions in and around the Persian Gulf and Red Sea as a key driver of the surge. Analysts at the Daiwa Institute of Research noted that there is a lag of roughly two months before higher crude prices are reflected in imports arriving at Japanese ports, meaning costs could continue to rise in the coming weeks as recent price moves feed into shipments. Japan has been adjusting its crude sourcing since late February, when the U.S.-Israel war with Iran began, after relying on the Middle East for about 90% of its oil previously. Tokyo has sought alternative suppliers including Nigeria, Angola, South Sudan, Azerbaijan, the United States and Canada, and has drawn on strategic inventories to maintain supplies. Those shifts, together with a growing war-related premium on oil prices, have driven up the country's energy import bill and leave little immediate prospect of relief, according to the reporting. (Reporting by Irina Slav for Oilprice.com.)