Qatar crisis poses no major threat to Japan’s energy imports

While Japan is a rich country in many ways, it is not so rich when it comes to energy. World’s third-largest economy imports most of its energy demands from abroad, which has increased significantly after 2011 Tsunami and Fukushima Daichi nuclear incident. Japan is the world’s biggest importer of liquefied natural gas (LNG) and that is why, right after the Qatar blockade was initiated by the Saudi-led Gulf States, Japan rushed to contact Qatar for assurances that its LNG supplies from Qatar would not be hampered by the crisis. The concern comes as the blockade is likely to continue indefinitely.

Qatar has provided assurances that LNG delivery would not be hampered as it has access to Iranian-controlled Straits of Hormuz. In addition to that, with a look at import data, we could confirm that Qatar crisis poses no major risk as Japan’s LNG imports are quite diversified, and while Qatar is a large exporter to Japan, it is hardly the biggest.

According to 2016 import data,

• Japan imported 26.9 percent of its LNG needs from Australia, its biggest importer. 18.6 percent came from Malaysia, and 14.5 percent came from Qatar. Russia provided about 8.8 percent, while the United Arab Emirates provided 6 percent. 8 percent of the LNG imports came from Indonesia. Rest 17.2 percent of the imports came from various countries across the world.

While Japan faces no energy crisis from the Qatar crisis, it is not immune to short-term troubles and troubles at company specific levels.