Tokyo Eyes Lifting Support for Overseas Oil Pipeline Investments

(Bloomberg) — Tokyo is planning to expand its financial support to Japanese companies investing in pipeline projects overseas including the Middle East, as part of efforts to strengthen alternative oil and gas transportation routes in the Gulf region to bypass the Strait of Hormuz.

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The government will consider measures including risk-capital funding in order to promote Japanese firms’ participation in such pipeline projects, according to a document released by the country’s Ministry of Economy, Trade and Industry late last week. The paper, which outlines key challenges and potential new measures aimed at strengthening Japan’s stable energy supply, was opened for public comment through Aug. 22.

The move comes as Saudi Arabia is considering expanding the capacity of its crude oil pipeline to the country’s Red Sea coast, Reuters has reported. The head of Japan’s oil refiners’ lobby group said in mid-July that both Abu Dhabi and Riyadh had asked Tokyo to cooperate in expanding pipeline facilities in the region.

The ministry is likely seeking to expand the role of the Japan Organization for Metals and Energy Security as one of the potential measures to achieve this, according to a Meti official. This includes allowing Jogmec to provide financing for pipeline projects on a standalone basis, the official said.

The public company’s mandate for supporting oil transportation investments, including pipelines, is currently limited to projects associated with upstream oil and gas development, according to the ministry.

The import-dependent nation relies on the Middle East for nearly all of its oil, and has been hit particularly hard by the effective closure of the Strait of Hormuz. More than 90% of Japan’s crude oil imports passed through the strait in 2025, according to Meti.

The country’s crude imports in July are expected to be fully sourced from areas that don’t require transit through Hormuz, Prime Minister Sanae Takaichi said last month, to make up for supply shortages resulting from disruption in the strait.