Japan has committed to increasing its purchases of American energy products as part of a trade agreement finalized in July with the United States. However, the nation’s refining industry has raised concerns about its capacity to process the volume of crude oil that President Donald Trump envisions. The deal, which Trump described as “a massive Deal with Japan, perhaps the largest Deal ever made” on social media, aims to enhance U.S. energy exports while adjusting tariffs on Japanese goods imported into the United States.
Under the terms of the agreement, tariffs on Japanese imports will decrease to 15%, down from the 24% initially proposed in April, and 25% as suggested by Trump in July, effective from August 1. The White House emphasized the deal’s potential to significantly expand U.S. energy exports to Japan. Despite this, Japan faces challenges in increasing its imports of American crude oil.
Japanese refiners are examining ways to boost their U.S. crude imports, which surged to approximately 190,000 barrels per day (bpd) in May 2025, marking a remarkable 180% increase from the previous year. This figure represents the highest monthly import volume of U.S. crude in Japan since December 2018, based on estimates from Argus and data from the Japanese industry ministry. Nonetheless, the share of crude imports from the Middle East remains substantial, accounting for around 95% of Japan’s total oil supply.
The logistical and technical limitations of Japan’s refineries are significant factors constraining the ability to process U.S. crude. According to Shunichi Kito, president of the Petroleum Association of Japan and representative director of the Japanese refiner Idemitsu, “Frankly, we have no major alternative to Middle Eastern crude.” Kito further stated that “probably no units can process 100%-pure U.S. crude in Japan.”
The longer shipping routes required for U.S. crude, combined with the existing specifications of Japanese refineries, which primarily accommodate crude from the Middle East, pose additional hurdles. While Japan has made strides in increasing imports of American crude, the transition to a more diversified supply chain appears to be a complex challenge.
As Japan navigates its energy purchasing strategy, the implications of this trade deal and the ongoing reliance on Middle Eastern crude oil will likely shape the future of the country’s energy landscape.
