Japan's government is working to mitigate the economic fallout from the Middle East war, as oil shortages drive inflation and threaten Prime Minister Sanae Takaichi's strong poll lead. New polling reveals a surge in public concern over naphtha, a crude oil derivative used in numerous products, despite few having heard of it months ago.
What is Naphtha?
Naphtha refers to a range of highly flammable liquid mixtures derived from oil and other sources. It is essential for producing petrol, plastics, insulation foam, adhesives, medical supplies like syringes, and printing ink solvents. While used globally, Asia is especially vulnerable to disruptions as the largest market for Middle Eastern naphtha exports.
Why is Japan Worried?
The word "naphtha" (pronounced "nafusa" in Japanese) recently entered public discourse through news reports on the Strait of Hormuz blockade's impact on supply chains. However, the crisis became tangible when Calbee, Japan's largest snack maker, announced on May 12 that it would switch to monochrome packaging for its flagship potato chips due to ink shortages. Wholesale inflation in April accelerated at its fastest pace in three years, with naphtha prices spiking 79.4%.
While Japan holds substantial petrol stockpiles, there are concerns the government is downplaying risks to other industries. Japanese media have run extensive segments explaining naphtha and its implications. A Kyodo News poll found over 70% of respondents worried about naphtha supply disruptions.
Government Response
Japan sources over 90% of its oil from the Middle East, making it highly sensitive to supply issues. After Calbee's announcement, the deputy chief cabinet secretary assured the public that adequate naphtha for ink had been secured. Prime Minister Takaichi has insisted Japan is finding alternative oil sources and has resisted calls for consumption reduction, unlike some Asian neighbors. However, naphtha shortages are already affecting plastic production, prompting Environment Minister Hirotaka Ishihara to echo assurances on garbage bag supplies: "We have secured the necessary supply. Please remain calm and avoid panic buying." Despite official claims, Japanese media report supply chain disruptions in construction, dry cleaning, food processing, and paint production.
Impact on Takaichi's Popularity
The cabinet's approval rating fell 2.5 percentage points to 61.3% in a Kyodo News poll, but this follows a decline from post-election highs. It is unclear how much the Middle East crisis affects public opinion. Over 70% of respondents believe the government should call for energy conservation.
