Iran War Disrupts Oil Imports, Japan Trade Deficit 1.01 Trillion Yen

Illustration of a tanker. Photo: Pexels.

Japan recorded a trade deficit of 1.01 trillion yen or about 6.2 billion US dollars from January to June 2026. The Iran war and disruption of shipments through the Strait of Hormuz pressured oil imports from the Middle East, while the weakening of the yen made import costs swell.

Kyodo News, quoted Wednesday, July 22, said that preliminary data from the Japanese Ministry of Finance showed that crude oil imports from the Middle East fell 26.4 percent to 47.31 million kiloliters.

The decline came after the United States and Israel attacked Iran in late February. The Japanese government then sought other suppliers to maintain fuel needs.

Oil imports from the United States jumped 210.3 percent to 5.7 million kiloliters. The figure was the highest for a six-month period since comparable data became available in 1979.

In June alone, oil imports from the United States rose 5.6 times to 2.72 million kiloliters.

The change in the source of supply occurred when Japan was still heavily dependent on imported oil. Before the Iran war, more than 90 percent of the country's oil imports came from the Middle East.

A Ministry of Finance official said Japan's crude oil import volume in June reached more than 86 percent of the volume in the same month last year.

Japan is also expected to meet its crude oil import target in July with the same amount as the previous year.

However, efforts to maintain import volumes have not been able to hold off the increase in costs. A weaker yen against the US dollar, rising raw material prices, and shipping disruptions in the Strait of Hormuz have made the value of imports larger.

The increase in import value is greater than the strong export growth.

Although it shrank by 57 percent compared to the same period last year, Japan still recorded a trade deficit for 10 consecutive half-year periods.

A trade deficit occurs when the value of imports is greater than exports.

Japanese imports rose 10.7 percent to 61.67 trillion yen in the first half of 2026. The increase was driven by demand for semiconductors from Taiwan, non-ferrous metals, and smartphones.

Exports grew 13.7 percent to 60.66 trillion yen. The main drivers were shipments of semiconductors and electronic devices to China and cars to a number of markets, including the European Union.

With the United States, Japan posted a trade surplus of 3.15 trillion yen. Exports rose thanks to demand for excavators and electric vehicles.

However, imports from the United States grew faster due to purchases of crude oil, liquefied petroleum gas or LPG, and petroleum products.

Meanwhile, Japan recorded a trade deficit of 4.64 trillion yen with China.

Both countries' exports and imports grew by double digits and reached their highest level since 1979. Trade remained active even though Tokyo and Beijing's relations were tense due to the Taiwan issue.

The main commodities traded are semiconductors and electronic devices. The trade in these goods is driven by the growth of artificial intelligence.

In June alone, Japan recorded a trade deficit of 406.9 billion yen.