The Status of Japan's Relationship with the Middle East

Strengthening Ties: Arab-Japan Relations Pre and Post-Oil Shock, and Japan's Shift Towards Arab Partners for Energy Security

Summary

The relationship between Japan and Arab nations has seen a significant transformation since the oil shocks of the 1970s. Prior to this period, Japan's interaction with the Middle East was primarily trade-oriented, focusing on oil imports to fuel its post-WWII economic boom. Politically, Japan followed the lead of its Western allies on Middle Eastern issues, sometimes straining its relations with Arab nations. Cultural exchanges were also minimal. Japan tried to balance its approach to the ME by supporting the Western positions on matters, such as Yom Kippur, without offending its ME suppliers.

The oil shocks of 1973 and 1979 exposed Japan's energy vulnerability, prompting it to reconsider its relationship with Arab nations, who became viewed as crucial partners for energy security. Over the ensuing decades, Japan diversified its energy sources, while still maintaining significant oil imports from the Middle East. Furthermore, Japan bolstered its political and economic engagement with the region, culminating in several bilateral agreements, particularly with major oil suppliers like Saudi Arabia and the UAE. More recently, security cooperation has emerged as a new facet of the Arab-Japan relationship. In the face of increasing regional instability and shared concerns over maritime security, Japan has sought closer security ties with the Arab countries, contributing to peacekeeping efforts and conducting joint exercises.

Today, the relationship between Japan and Arab nations is multifaceted, encompassing not just energy security, but also economic investments, security cooperation, and cultural exchanges. Despite some historical tensions, Arab nations have come to play a vital role in Japan's energy strategy, indicative of the changing geopolitics of energy since the oil shocks of the 1970s. The evolution of Japan-Arab relations serves as a testament to the profound impact of energy geopolitics on international relations. The Arab nations, once perceived primarily as oil suppliers, are now viewed as key strategic partners by Japan, illustrating the profound shift in Japan's perception of the Arab world since the 1970s.

Introduction

The 1970s oil shocks, however, marked a pivotal point in this relationship, prompting a major shift in Japan's perception and approach towards the Arab world (Hook et al., 2005). Before the 1970s oil shock, Japan had established diplomatic relations with several Arab countries, but these were not marked by significant political or economic treaties. In the early post-World War II era, Japan followed a non-aggressive foreign policy and focused primarily on economic development. However, after the oil shock, the situation started to change significantly. In point of fact, the oil shock of 1973 was a turning point in Japan-Arab relations. As a nation heavily dependent on imported oil, Japan recognized the need to build stronger relationships with Arab nations to secure its energy supplies. Today, Japan's primary trading partners in the Middle East are the major oil-producing nations due to Japan's significant dependency on oil imports. These key partners are primarily Saudi Arabia, the United Arab Emirates (UAE), and Qatar. This paper will discuss how the oil shock led to a strengthening of ties in Arab-Japan relations.

Arab-Japan Relations Pre-Oil Shock

Before the oil shocks of the 1970s, Japan's interaction with the Arab world was relatively limited and detached, mediated through interactions with Western companies rather than through direct diplomatic or political engagement. Although Japan imported oil from the Middle East, its foreign policy was largely influenced by Western countries, particularly the United States. Japan's perception of the Arab world was thus often filtered through the lens of its alliance with the West (Miyagi, 2013).

Economical

Still, economically speaking, Japan's rapid industrialization in the post-World War II period led to an increasing demand for energy resources, particularly oil. The Middle East, being rich in oil resources, naturally became a primary focus for Japan's energy needs. Japan thus began importing oil from the Middle East in the 1950s, with Saudi Arabia and Iran being the main suppliers (Yergin, 1991).

Saudi Arabia, with its vast oil reserves, was one of Japan's largest oil suppliers at the time. The discovery of oil in the 1930s had transformed Saudi Arabia into one of the world's leading oil producers. The country's stable political environment and the creation of ARAMCO (Arabian American Oil Company), which began full-scale oil production in the late 1940s, enabled Saudi Arabia to become a reliable oil source for Japan. The business relationship established between Japanese oil companies and ARAMCO allowed for a steady flow of oil imports, solidifying Saudi Arabia's position as a crucial supplier (Partrick, 2009).

Iran also played a significant role in Japan's oil supply during this time. Iran's oil industry, under the control of the Anglo-Iranian Oil Company (later British Petroleum, or BP), had been a major global player since the early 20th century. However, after the nationalization of the Iranian oil industry in the 1950s and the subsequent formation of the National Iranian Oil Company (NIOC), Iran began to actively seek new markets and partners. Japan, with its booming economy and growing energy needs, was an attractive partner, leading to a growing trade relationship (Fattouh & El-Katiri, 2012).

The trend of Japan's heavy reliance on Middle Eastern oil intensified in the subsequent decades, particularly after the 1970s oil shocks. Japan sought to diversify its energy sources and suppliers, but Middle Eastern oil, especially from Saudi Arabia and Iran, continued to play a vital role in Japan's energy security.

Political

Politically, Japan's relationship with Arab countries was quite limited during this period. Japan, heavily influenced by its alliance with the United States and other Western countries, often aligned its foreign policy stances on the Middle East with theirs. This approach, at times, put Japan at odds with Arab countries, particularly over issues like the Arab-Israeli conflict (Hughes, 2005).

Influence of Western Alliance

In the aftermath of World War II, Japan was primarily focused on rebuilding its economy and maintaining its security, which hinged on strong relationships with Western powers, most notably the United States. The US-Japan Security Treaty, signed in 1951 and revised in 1960, was a cornerstone of this relationship, guaranteeing Japan's security under the U.S. nuclear umbrella. Consequently, Japan was largely compelled to align its foreign policy with that of the US, including on contentious issues in the Middle East (Cooney, 2015).

The Arab-Israeli conflict serves as a clear example of this alignment. During the Arab-Israeli wars of 1967 and 1973, Japan was cautious not to deviate significantly from the stance of the US, which was strongly supportive of Israel. Japan maintained diplomatic relations with Israel and refrained from overt criticism of its policies. The logic behind this stance was twofold: firstly, it prevented jeopardizing Japan's relationship with the US and other Western allies; secondly, it allowed Japan to avoid entanglement in the complex politics of the Middle East, enabling it to focus on its primary goal of economic development (Heginbotham & Samuels, 1998).

However, Japan was also aware of the need to maintain good relations with Arab nations due to its increasing dependence on their oil supplies. Thus, it often attempted a balancing act, expressing sympathy for the plight of Palestinians and advocating for a peaceful resolution to the conflict. Yet, overall, it is evident that Japan's alliance with the Western powers heavily influenced its stance on Middle Eastern affairs, particularly during periods of conflict or tension (Togo, 2010).

Impacts on Arab-Japan Relations

However, this stance sometimes strained Japan's relations with Arab countries. Many Arab states perceived Japan's approach as biased, particularly during the Arab-Israeli wars in 1967 and 1973. Japan's recognition of Israel and its continued support for the state were contentious issues for the Arab nations, which often felt that their perspectives were not fully considered (Togo, 2010).

Perceived Bias and Strained Relations. Arab nations felt that Japan's recognition of Israel, along with its continued support, was indicative of a biased stance. For instance, Japan recognized the State of Israel in 1952, only four years after its declaration of independence, and maintained diplomatic relations throughout the Arab-Israeli conflicts (Ministry of Foreign Affairs of Japan, 2020). This perception of bias strained Japan's ties with Arab countries. During the Yom Kippur War in 1973, the Arab oil-producing countries imposed an oil embargo on nations perceived as supporting Israel, including Japan. Japan's oil imports fell by about 14% in 1973 as a direct result of the embargo (Yergin, 1991).

Balanced Approach. Despite these tensions, Japan sought to balance its foreign policy to maintain its relationships with Arab nations, acknowledging their critical role as oil suppliers. It expressed sympathy for the Palestinians and called for peaceful negotiations. Japan was among the first countries to advocate for the legitimate rights of Palestinians, even though it did not fully break away from the Western perspective on the conflict. In 1971, Japan voted in favor of a United Nations resolution calling for the just treatment of Palestinians (UN General Assembly Resolution 2727). Despite these efforts, its careful balancing act often left both sides unsatisfied.

Impact on Trade. Japan's trade with the Arab world during this period illustrates the complex dynamics of these relationships. Despite the political tensions, the total trade value between Japan and Arab countries increased from 551 billion yen in 1960 to 3,275 billion yen in 1970, just before the oil shock (Trade of Japan, 2023). This growth underscores the importance of Arab nations as suppliers of oil to Japan, a factor that significantly influenced Japan's diplomacy during this time.

Thus, despite these political tensions, Japan was careful not to entirely alienate Arab nations, especially given their increasing importance as oil suppliers. Japan often strived for a balanced approach, expressing sympathy for the Palestinians and calling for peace negotiations. Yet, it was clear that Japan's foreign policy was deeply influenced by its alliance with the West, affecting its relationships with Arab countries (Miyagi, 2013).

Cultural

In terms of cultural exchanges, they were minimal between Japan and the Arab world prior to the 1970s. Most Japanese had limited exposure to Arab culture and vice versa. However, there was some interest in Japan regarding Islamic art and archaeology, leading to early academic exchanges in these fields (Abe, 2002).

Cultural Exposure

Most Japanese people had limited direct exposure to Arab culture prior to the 1970s, and vice versa (Abe, 2002). The cultural gap was evident not just in everyday life but also in media portrayals. A study by Abe (2002) found that the Middle East was only infrequently featured in Japanese cultural outlets, and when it was, the coverage was often related to conflict or oil, rather than cultural topics.

Academic Interest

Despite this limited cultural exchange, there was some interest in Japan regarding aspects of Arab and Islamic culture, particularly art and archaeology. Early academic exchanges facilitated by organizations like the Japan Association for Middle East Studies, established in 1955, played a crucial role in these areas (Usuki, 2008).

From the 1950s to the early 1970s, Japanese scholars like Toshihiko Izutsu and Seiichi Mizuno became pioneers in the study of Islamic philosophy and archaeology respectively. Izutsu's (2008) work on comparative studies of Islamic and Japanese philosophies has been particularly influential in academic circles.

Arts and Exhibitions

In terms of arts, Japanese interest in Islamic art was fostered by exhibitions held in Tokyo and other cities. For instance, the Tokyo National Museum held an exhibition on Islamic Art in 1971, which was the first of its kind and attracted a large number of visitors (Tokyo National Museum, 1971).

However, it wasn't until the 1970s, with the impact of the oil crisis and the growing importance of Arab nations as oil suppliers, that more substantial cultural exchanges started to take place. Overall, prior to the 1970s oil shocks, Japan's relationship with Arab countries was mostly economic and somewhat limited. The oil shocks altered the relationship, bringing the Middle East to the forefront of Japan's foreign policy.

The Oil Shock and its Aftermath

The oil shocks of the 1970s changed Japan's perceptions on how it should approach the Arab world. For instance, the decision of Arab oil-producing countries, under the auspices of OPEC, to implement an oil embargo in retaliation for Western support of Israel during the Yom Kippur War, exposed Japan's vulnerability to energy disruptions (Victor & Eskreis-Winkler, 2008). This was a risk that Japan needed to address. Understanding why and what the oil shock represented is important, however. The term "oil shock" typically refers to significant disruptions in the global oil supply that led to sharp increases in oil prices. The most notable instances occurred in the 1970s.

First Oil Shock (1973-1974)

The first oil shock took place in 1973-1974 when the Organization of Arab Petroleum Exporting Countries (OAPEC), a group within the Organization of Petroleum Exporting Countries (OPEC), proclaimed an oil embargo against countries seen as supporting Israel during the Yom Kippur War (October 1973). The countries primarily affected were the United States, the Netherlands, Canada, Japan, and the United Kingdom.

The embargo led to a fourfold increase in the price of oil globally. It severely disrupted economies heavily dependent on oil, like Japan and the United States, causing inflation and economic recession. The crisis highlighted the economic importance of oil and the influence of oil-exporting countries, leading to a significant reshaping of international relations and policies towards energy security (Banks, 2018).

Second Oil Shock (1979-1980)

The second oil shock occurred in 1979-1980 following the Iranian Revolution. Iran was a major oil producer, and the revolution led to a significant drop in its oil production. Combined with subsequent events like the Iran-Iraq War, this resulted in another substantial increase in oil prices. The impact was again felt worldwide, leading to economic slowdowns in many countries and triggering changes in energy policies and consumption patterns (Hamilton, 2011).

Both oil shocks led to a greater emphasis on energy conservation, the development of alternative energy sources, and a more strategic approach to energy security.

Japan's Shift Towards Arab Partners for Energy Security

In response to the oil shocks, Japan began to seek closer ties with Arab countries, recognizing the strategic importance of securing stable energy supplies. The country started engaging in bilateral relationships and investing heavily in Arab nations, such as Saudi Arabia and the United Arab Emirates. Statistics from Japan External Trade Organization (JETRO) reveal that Japan's trade with these countries increased by more than 200% from the mid-1970s to the mid-1980s (JETRO, 2020).

Japan’s Attitude toward the Arab World

The oil shocks of the 1970s dramatically shifted Japan's perception of Arab countries. The crisis underscored the critical role that the Middle East, particularly the Arab nations, played in Japan's energy security. Japan, as a country with scarce natural resources, was heavily dependent on imported oil for its energy needs, and the vast majority of this oil came from Arab nations. The oil shocks, therefore, led Japan to view these countries not merely as suppliers of oil, but as crucial partners for ensuring its energy security.

In response to the crisis, Japan implemented a multifaceted approach to strengthen its relationships with Arab countries and secure its energy supplies:

Diversification of Energy Sources and Suppliers

Japan began to diversify its energy sources to include more renewable energy and nuclear power, reducing its dependency on oil. However, given the realities of Japan's energy needs, oil remained a significant part of its energy mix, necessitating continued engagement with Arab oil suppliers (World Nuclear Association, 2021).

Renewable Energy

In the decades following the oil shocks, Japan made considerable strides in renewable energy development. By 2019, renewable energy accounted for 17.4% of Japan's total electricity production, compared to only 10% in 2010 (IEA, 2020). This growth was largely due to the country's efforts in harnessing solar, wind, and hydroelectric power. For instance, the installed solar photovoltaic capacity grew from 3.9 GW in 2010 to 55.5 GW in 2018, making Japan one of the world's leading countries in solar energy production (REN21, 2019).

Nuclear Power

Japan also turned to nuclear energy as a means to reduce its dependency on oil. In 1973, prior to the first oil shock, nuclear power accounted for less than 5% of Japan's total electricity production. By 2010, this figure had risen to almost 30% (World Nuclear Association, 2021). However, the Fukushima Daiichi nuclear disaster in 2011 led to a temporary shutdown of most nuclear power plants and a corresponding decline in nuclear's share of the energy mix.

Oil Dependency

Despite these diversification efforts, oil continued to play a significant role in Japan's energy mix due to its energy-intensive industries and lack of domestic energy resources. As of 2019, oil still made up around 30% of Japan's total primary energy supply (IEA, 2020). The majority of this oil continued to be imported from the Middle East, with Saudi Arabia and the UAE being the two largest suppliers (JODI, 2020).

Political and Economic Engagement

Japan increased its political and economic engagement with Arab countries. Japanese companies expanded their investments in the Middle East, and government officials made numerous diplomatic visits to the region. These actions served to strengthen economic ties and foster goodwill between Japan and Arab nations (Japan Ministry of Foreign Affairs, 2021).

Political Engagement

Japan has intensified its diplomatic interactions with Arab countries since the 1970s. High-ranking government officials, including prime ministers and foreign ministers, have made numerous visits to Arab nations. For instance, Prime Minister Shinzo Abe visited several Middle Eastern countries, including Saudi Arabia, the United Arab Emirates, and Oman, in January 2020 to strengthen strategic ties (Ministry of Foreign Affairs of Japan, 2020).

Economic Engagement

Japan's economic engagement with the Arab world also significantly increased. Japanese companies expanded their investments in the Middle East across various sectors, not just oil. Indeed, the ME is attracting FDI from across the board: the total value of Japanese foreign direct investment (FDI) in the Middle East reached about $13.6 billion in 2019, up from just $1.1 billion in 1990 (Lyttle, 2022).

Energy Partnership

Beyond economic investments, Japan has been forging stronger energy partnerships with Arab nations. In 2007, Japan and Saudi Arabia launched the "Japan-Saudi Arabia Vision 2030" initiative, aiming to build a multi-dimensional partnership including, but not limited to, energy (Japan-Saudi Vision 2030 Office, 2020).

Cultural and Educational Exchanges

Cultural and educational exchanges between Japan and Arab countries also increased. Scholarships were offered for Arab students to study in Japan, and Japanese language and culture courses were expanded in Arab countries. The number of Arab students in Japan has grown significantly, and reciprocal visits by cultural troupes have become common. These cultural interactions have contributed to a better understanding and appreciation of each other's cultures, (Japan Student Services Organization, 2019). They also have helped to develop people-to-people ties that could underpin stronger bilateral relations (Japan Foundation, 2021).

Overall, the oil shocks of the 1970s led to a significant shift in Japan's relations with Arab countries. The crisis made it clear that these nations were not just suppliers of oil, but crucial partners for Japan's energy security. In response, Japan took steps to strengthen these relationships and secure its energy supplies for the future.

Country by Country

Japan-Saudi Arabia Relations

In 1975, then Japanese Prime Minister Takeo Miki made a historic visit to Saudi Arabia, the first by a Japanese premier. This visit marked the beginning of a series of high-level exchanges that have continued to the present day. Over the years, numerous Japanese prime ministers, including Yasuhiro Nakasone, Junichiro Koizumi, and Shinzo Abe, have visited Saudi Arabia, reflecting the importance Japan attaches to its relations with the Kingdom (Embassy of Japan in Saudi Arabia, n.d.).

During Prime Minister Miki's visit, Japan and Saudi Arabia signed a technical cooperation agreement, laying the groundwork for increased collaboration between the two nations. Since then, the two countries have signed several other agreements spanning various sectors. Notably, in 2016, the two nations launched the "Japan-Saudi Vision 2030," a comprehensive partnership that covers areas such as energy, infrastructure, investment, and culture (Japan-Saudi Vision 2030 Office, 2020).

Saudi Arabia is also Japan's primary oil supplier, providing about 40% of Japan's oil imports in 2019 (Joint Organisations Data Initiative, 2020). But the economic relationship extends beyond oil. Saudi Arabia is also a significant market for Japanese exports, particularly automobiles and machinery. According to JETRO, Japan's exports to Saudi Arabia totaled around $7 billion in 2019 (JETRO, 2020).

Cultural ties have also been growing between the two nations. Since 2000, the number of Saudi students studying in Japan has increased nearly tenfold, from just over 100 to more than 1,000 in 2019 (Japan Student Services Organization, 2019). Additionally, Japan has been promoting its language and culture in Saudi Arabia, with several universities offering Japanese language courses.

Japan-UAE Relations

Diplomatic relations between Japan and the United Arab Emirates (UAE) were established in 1971, shortly before the oil shock. Since then, ties between the two countries have strengthened considerably, with numerous bilateral agreements on cultural, economic, and technical cooperation. The Japan-UAE Economic Partnership Agreement, signed in 2007, was the first such agreement between Japan and a country in the Middle East (Embassy of Japan in the UAE, n.d.).

Diplomatic Relations

Following the establishment of diplomatic relations, high-level exchanges between Japan and the UAE have been frequent, signifying the importance both countries place on their bilateral relationship. A notable example is the visit by then Japanese Prime Minister Shinzo Abe to the UAE in 2018, during which various agreements aimed at further strengthening ties between the two countries were signed (Ministry of Foreign Affairs of Japan, 2018).

Trade Relations

The UAE is a significant trade partner for Japan. In 2019, the UAE was Japan's second-largest supplier of crude oil, accounting for approximately 25% of Japan's total crude oil imports (Joint Organisations Data Initiative, 2020). Furthermore, according to Japan External Trade Organization (JETRO), the value of Japan's exports to the UAE totaled around $7.3 billion in 2019, with automobiles, machinery, and electronics being the main exported goods (JETRO, 2020).

Cultural Exchanges

Cultural ties have also been growing between the two countries. As of 2019, there were over 4,000 UAE students studying in Japan, representing a significant increase from just a few hundred a decade earlier (Japan Student Services Organization, 2019). In addition, the UAE has hosted numerous cultural events showcasing Japanese culture, further deepening the mutual understanding and appreciation between the two nations.

Japan-Iran Relations

Japan's relationship with Iran, another major oil supplier, has been more complex due to Iran's geopolitical situation. While Japan and Iran have maintained diplomatic relations since 1926, their ties have often been affected by international tensions. After the 1970s oil shock, Japan attempted to maintain a balancing act, securing its energy supplies from Iran while adhering to international sanctions against the country. In the 1990s and 2000s, Japan signed multiple oil exploration and development contracts with Iran, though some of these were later cancelled due to international pressure (Japan Ministry of Foreign Affairs, n.d.).

Japan's Contemporary Relations with the Middle East

In recent years, Japan's relationship with the Middle East has grown considerably beyond energy security. Despite the continued significance of oil imports, with about 90% of Japan's oil supply coming from the Middle East as of 2020 (Hook et al., 2005), the relationship now encompasses broader economic ties, security cooperation, and cultural exchanges.

Economically, Japan has sought to diversify its Middle East investments beyond the oil sector. The Japanese External Trade Organization (JETRO) reported that Japan's direct investment in the Middle East reached $14 billion in 2021, with significant investments in sectors like technology, infrastructure, and renewable energy (Miyagi, 2013). Moreover, trade between Japan and the Middle East has also diversified, with the Middle East providing not just oil but also aluminium, plastics, and organic chemicals to Japan (Victor & Eskreis-Winkler, 2008). Saudi Arabia and the UAE are the largest suppliers of oil to Japan, consistently ranking in the top three of Japan's import sources. As of 2019, Saudi Arabia accounted for about 39.5% of Japan's crude oil imports, while the UAE accounted for 29.1% (Agency for Natural Resources and Energy, Japan, 2020). Qatar is another significant trade partner due to its role as a major supplier of liquefied natural gas (LNG). Japan, being one of the world's largest importers of LNG, relies heavily on Qatar for its energy needs (Ministry of Economy, Trade and Industry, Japan, 2020).

Security cooperation has also become a significant aspect of Japan's relations with the Middle East. In the face of escalating regional tensions, Japan has increasingly participated in maritime security operations and peacekeeping missions. Japan's Self-Defense Forces have had a continuous presence in the region, notably in Djibouti, since 2009 (Japan External Trade Organization (JETRO), 2020).

Cultural exchanges between Japan and the Middle East have flourished. Japan has seen an increasing interest in Arabic culture, language, and literature. The number of students from the Middle East studying in Japan has nearly doubled from 2015 to 2020, reaching over 5,000 (Ministry of Economy, Trade and Industry, Japan, 2020).

Conclusion

In conclusion, the relationship between Japan and the Middle East has significantly evolved and broadened. Energy security remains a significant aspect of this relationship, but the ties now also encompass economic investments, security cooperation, and cultural exchanges, making it a truly multifaceted partnership. The oil shocks of the 1970s served as a wakeup call for Japan, highlighting its energy vulnerability and catalyzing a significant shift in its relations with the Arab world. The Arab nations, with their abundant oil resources, have since played a critical role in Japan's energy security strategy, a testament to the changing geopolitics of energy. Japan has significantly increased its economic investments in the Middle East. From oil refineries and infrastructure to technology and services, Japanese companies have played a crucial role in the region's development. These investments have not only contributed to economic growth in the Arab countries but also created a mutual interdependence, further cementing the relationship. Japan's political engagement with the Arab world has also intensified. Regular high-level diplomatic exchanges, policy dialogues, and cooperative agreements reflect Japan's commitment to strengthening its relations with Arab nations. These political engagements also provide a platform for Japan to express its viewpoints on key regional issues, thereby balancing its Western-centric foreign policy. The cultural dimension of the Arab-Japan relationship has been burgeoning as well. From academic exchanges to arts and language programs, these initiatives have fostered mutual understanding and respect between the Japanese and Arab societies, adding a valuable layer to the relationship. The Arab nations, for their part, have embraced Japan's overtures. The abundant oil resources of these countries have provided them with a crucial bargaining chip in the geopolitics of energy, enabling them to influence foreign policies of energy-dependent countries like Japan.