Japan faces summer power risks over Middle East LNG
Japan faces a summer power crunch as Middle East conflicts disrupt LNG shipments. Analysts warn that a 3.5 percent supply drop will impact reserve margins.
Japan is facing a heightened risk of a power supply crunch this summer as geopolitical instability in the Middle East threatens the delivery of liquefied Natural Gas. Takafumi Yanagisawa, an executive analyst at the Institute of Energy Economics, Japan (IEEJ), warned on Monday that a prolonged crisis could impact electricity availability just as seasonal demand for air conditioning begins to rise.
The supply concerns stem from the effective closure of the Strait of Hormuz due to the ongoing conflict in Iran. This vital waterway facilitates the transport of approximately 4 million metric tons of fuel annually, which accounts for 6% of the total imports for the Japanese energy market. According to Yanagisawa, shipments from Qatar and the United Arab Emirates represented 4% and 2% of these imports respectively in 2024.
