Japan's government is growing increasingly concerned about rising oil prices with the double impact of the escalation of the Hamas-Israel conflict and output cuts by major oil producers.
"Oil price is in an underlying upwards trend," said the Japanese minister for trade and industry Yasutoshi Nishimura on 17 October, following the Hamas-Israel conflict and voluntary oil production cuts by some Opec+ members.
Nishimura said that the country is monitoring international energy prices with a "tense atmosphere", as further price hikes could affect Japan's economy that is already struggling with inflation.
"We'd like to strengthen closer co-operation with the IEA and the major producers," Nishimura stressed, adding that he is willing to appeal to producing and consuming countries to discuss output boosts through investments to stabilise the energy market.
The latest turmoil in the Middle East could justify a further extension of oil product subsidies that the Japanese government implemented following the outbreak of the war in Ukraine. The country's prime minister Fumio Kishida is to announce new comprehensive economic measures later this month, with maintaining the subsidies likely a component.
Japan in August extended the subsidies to cap the rise in gasoline, gasoil, kerosine and fuel oil prices until the end of 2023, which was beyond an initially planned expiry at the end of September.
But there has been growing criticism that the subsidies could distort market prices, as well as delay energy transition measures to achieve decarbonisation.
