Middle Eastern crude was more than 90 percent of Japan's oil imports before the war, and the Bank of Japan has now published the vessel tracking that shows what replaced it
The Bank of Japan published the rest of its July report at two o'clock on Monday afternoon in Tokyo.
The decision itself came out on 31 July, and this site covered it: the policy board held the overnight call rate at around 1.0 percent by 8 votes to 1 and cut its core inflation forecast for fiscal 2026 to 2.5 percent, attributing the cut to government help with summer energy bills rather than to prices slowing. What was withheld until today is the background volume, 71 pages of staff analysis behind that decision. The most consequential part of it is a box on where Japan has been buying its oil.
The numbers the box puts on the record
Before the military conflict, Middle Eastern crude accounted for more than 90 percent of Japan's total crude oil imports. Naphtha was almost as concentrated, at 70 percent.
Both fell. Crude imports from the region declined significantly through March and April, and naphtha imports dropped sharply. From May onward crude rebounded, and the box says the rebound came with a diversification of supply: a marked rise in imports of American crude, alongside Middle Eastern cargoes routed to bypass the Strait of Hormuz. Naphtha was replaced from April by United States and Algerian barrels.
The evidence is not customs data. The box is built on what it calls alternative data derived from vessel tracking information, sourced to Kpler and dated 29 July, with a forward estimate based on historical vessel movement patterns that the chart note flags as subject to revision. On that basis the Bank expects import volumes to hold near pre-conflict levels for the time being.
The conclusion it draws is flat. A significant decline in economic activity from large scale supply chain disruption has been avoided.
What it cost to avoid
The strait itself is described in the document as under a "de facto closure" that remains in effect.
Dubai crude stayed near 100 dollars a barrel until May, the box says, fell back to pre-conflict levels after the United States and Iran signed a memorandum of understanding in mid June, and has turned up again since mid July as tension resurged. The Bank's working assumption is a monthly average of around 80 dollars for July through September, easing to around 70 by the end of the projection period, drawn from Brent futures curves as they stood on 21 July. That is lower across the whole horizon than the path assumed in the April report.
The prices Japanese firms are actually paying have come loose from that. Unit import prices for crude and naphtha from outside the Middle East run higher than for Middle Eastern cargoes, which the box attributes to longer transport distances among other factors. Middle Eastern unit prices are themselves elevated against market prices, partly because more of the buying is now done on the spot market. Unit import prices for mineral fuels, which used to track Dubai crude closely, are now high relative to it.
The box does not treat this as temporary. It records that a growing number of firms appear to be "irreversibly diversifying sources of supply for raw materials" to harden themselves against geopolitical risk, and that if that is what is happening, procurement costs will not fall back to what market prices imply. Those upstream costs, it says, get passed downstream into the prices of a variety of goods and services.
Three other boxes were published in the same volume, on artificial intelligence demand, on business to business price setting, and on what higher policy rates do to Japanese households.
