Japan has almost no oil of its own. It imports nearly everything. That's been true since the 1973 oil shock - and it's the reason the country spent 50 years building one of the deepest energy buffers on the planet.
Now it's using it.
Japan has 470 million barrels of oil in reserve - 254 days' worth of domestic demand. That's one of the largest buffers in the world.
The country needs it. Since the U.S.-Israel strikes on Iran began, shipping through the Strait of Hormuz has nearly stopped. Japanese-owned tankers are sitting still.
The chokepoint that Japan depends on for oil and gas is, for all practical purposes, closed.
Prime Minister Sanae Takaichi ordered a full review of the country's oil product supply chain. The government has started tapping strategic reserves.
The energy squeeze is already hitting Japanese industry. Multiple petrochemical companies have announced production cuts, worried that supplies of naphtha - a key ingredient in plastics manufacturing - won't hold up.
The conflict is piling onto an economy already under pressure from high prices and a weak yen. Fuel costs, electricity prices, and food prices are all expected to climb. Recent gains in real wages could be wiped out.
Japanese stocks have fallen since the war started. The IEA released 400 million barrels from global reserves, but at global consumption rates, that's roughly four days of supply.
Japan's 254-day cushion is large, but not infinite. The real question for investors is how long the Hormuz closure lasts - and whether Japan's industrial base can adapt fast enough to avoid deeper production cuts.
This crisis is already reviving the argument for faster nuclear reactor restarts in Japan.
In the longer term, it strengthens the case for electric vehicles, solar, and wind - anything that reduces dependence on Middle Eastern energy.
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