Japan dealing with oil price surge as Middle East conflict continues

As crude oil prices have surged due to the situation in Iran, All Nippon Airways and Japan Airlines plan to raise fuel surcharges on international flights for tickets issued in June and July to as much as twice the current levels.

Fuel surcharges, which the two Japanese airlines collect separately from airfare on international flights, are reviewed every two months based on fluctuations in crude oil prices and exchange rates.

Specifically, fuel surcharges for flights to Europe and North America are expected to rise from the current level of around 30,000 yen to over 50,000 yen, while those for destinations such as South Korea are likely to increase from about 3,000 yen to around 6,000 yen.

Meanwhile, the Ministry of Economy, Trade and Industry said Japan's imports of naphtha from regions outside the Middle East are expected to double in April.

Naphtha is a raw material used for petroleum-related products like plastics, and there are concerns about potential shortages due to escalating tensions in the Middle East.

Until now, Japan has sourced 40 percent of its naphtha from domestic production, 40 percent from Middle East imports and 20 percent from other regions.

With the Strait of Hormuz effectively blocked and both domestic production and imports from the Middle East declining, the ministry said on March 31 that imports of naphtha from other regions in April are expected to reach 900,000 tons, double the usual amount.

The ministry said the procurement sources include the United States, Peru, Algeria, India and Australia.

On April 1, a ship carrying US-produced naphtha that departed before the late February attack on Iran arrived off the coast of Ichihara, Chiba Prefecture.

The issue of energy security was also discussed at summit talks between Japanese Prime Minister Takaichi Sanae and Indonesian President Prabowo Subianto in Tokyo on March 31.

S/ Takaichi Sanae, Japanese Prime Minister / As the international situation becomes increasingly severe, cooperation with Indonesia, which is located at a strategic crossroads between the Indian and Pacific Oceans, is extremely important for realizing a Free and Open Indo-Pacific, or FOIP.

The two leaders confirmed that their countries will work closely together on energy security in light of developments in the Middle East.

At a joint press announcement following their meeting, Takaichi noted that Indonesia is a major resource-producing country while emphasizing that the importance of resource and energy security is being reaffirmed around the world due to the Iran situation.

They also reaffirmed plans to cooperate on human resource development in fields such as AI to support Indonesia's industrial growth, to strengthen disaster-prevention cooperation and to further enhance collaboration in maritime security.

The Indonesian president invited Takaichi to his country.