Japans Prime Minister warns of enormous impact on Asia-Pacific economies due to Iran war

Japan’s Prime Minister Sanae Takaichi has stated that the global oil supply squeeze caused by shipping disruptions in the Strait of Hormuz is having a significant impact on the Asia Pacific region. During her visit to Australia, where she signed agreements on energy and critical minerals, Takaichi emphasized the importance of close cooperation between Japan and Australia in addressing this issue.

The Strait of Hormuz, which accounts for roughly one-fifth of the world’s oil and liquefied natural gas supplies, has been blocked by Iran since February 28 due to the US-Israeli war on the country. Eighty percent of this oil is destined for Asia, according to the International Energy Agency.

Takaichi noted that Japan and Australia will work together closely to respond to the situation with a sense of urgency. Australia provides approximately one-third of Japan’s energy supplies and is its largest market for liquefied natural gas. Both countries have been seeking to shore up their energy supplies due to the conflict in Iran.

Australian Prime Minister Anthony Albanese has also expressed concern over disruptions to oil supply, stating that his country is committed to supporting Japan’s efforts to secure critical minerals. Australia has announced plans to provide up to $1.3 billion in funding for Japanese-led critical mineral projects, which could potentially supply Japan with essential resources such as gallium and rare earths.

The agreements signed between Japan and Australia mark a significant step forward in their bilateral cooperation on energy, economy, defense, and critical minerals. The two countries have strengthened their military ties in recent years, particularly amid concerns about China’s growing influence in the region.

Source: Al Jazeera