Japan plans $19 billion energy relief package for fiscal 2026 amid Middle East supply strains

The Japanese government plans to draft an additional relief package worth 3 trillion yen (approximately $19 billion) during the 2026 fiscal year to combat rising energy prices triggered by the war in Iran.

According to sources familiar with the matter who spoke to the Kyodo news agency, the primary objective of the measure is to ease the burden of escalating energy costs on households.

The government is considering deploying approximately 500 billion yen (about $3.15 billion) from reserves allocated in the initial 2026 budget to subsidize public utility bills ahead of the upcoming summer months.

These reserves are expected to be replenished through upcoming supplementary budget adjustments.

Japan relies on imports from the Middle East for 90% of its petroleum needs. Consequently, supply chain disruptions following recent conflicts in the region have subjected the country to severe resource constraints.

On April 26, an oil tanker arrived in Japan for the first time since the regional hostilities began. However, this shipment of 910,000 barrels purchased from the US remains marginal when compared to the nation’s daily petroleum consumption.

In its ongoing search for alternative energy sources, Japan has accelerated both diplomatic and commercial negotiations. In May, Askhat Khasenov, the chairman of Kazakhstan’s state-run oil and gas company KazMunayGas, met with a delegation from the Japanese parliament to discuss the viability of shipping Kazakh crude oil to Japan.

In April, Nikkei Asia reported that Japanese manufacturers were experiencing severe difficulties securing naphtha supplies due to a blockade in the Strait of Hormuz.

At the time, Prime Minister Sanae Takaichi emphasized that the country maintained a four-month reserve, announcing that an additional release of crude equivalent to 20 days of consumption from national stockpiles would commence in May.

Previously in March, Japanese public broadcaster NHK reported that energy firm Inpex was considering crude oil imports from Central Asia to bypass Middle Eastern shipping disruptions and ensure supply security.