Japan PM says oil crisis has 'enormous impact' in Asia-Pacific

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TOKYO: The escalating oil crisis in the Middle East is exerting an ‘enormous impact’ on the Asia-Pacific region, according to Japanese Prime Minister Sanae Takaichi. 

Following high-level talks in Canberra with Australian Prime Minister Anthony Albanese, Takaichi emphasised that both nations must respond with a sense of urgency to ensure regional energy stability.

The crisis is primarily driven by the ‘effective closure’ of the Strait of Hormuz. This critical maritime chokepoint, through which one-fifth of the world’s oil typically flows, has been throttled by Iran following military strikes by the United States and Israel. 

International Energy Agency data reveals that 80 percent of the oil passing through this strait is destined for Asian markets, making the region particularly vulnerable to these disruptions.

In response to these ‘global shocks,’ Japan and Australia have committed to strengthening their collective autonomy and resilience. Prime Minister Albanese noted that these agreements aim to reduce Australia's vulnerability to Middle Eastern conflicts. The two leaders issued several statements vowing to deepen cooperation across energy, the economy, and defence.

A central pillar of this partnership is the secure supply of critical minerals. These resources are essential for manufacturing semiconductors, electric vehicle batteries, and advanced weapons systems. 

By collaborating on these minerals, Australia and Japan hope to loosen China's dominant grip over the global rare earths supply chain.

Beyond energy, the two nations are fortifying their security ties. This includes a US$6 billion deal for Japan to provide Mogami-class stealth warships to the Australian navy. This hardware cooperation serves as a foundation for a broader strategic alignment in the face of rising regional tensions.

Prime Minister Takaichi's visit reinforces the vision of a ‘free and open Indo-Pacific’. By strengthening supply chains and enhancing security cooperation, Japan and Australia aim to build a resilient regional framework capable of weathering significant geopolitical and economic instability.