Shigeru Ishiba, the Prime Minister of Japan, is contemplating a proposal from President Donald Trump to purchase American oil to address the trade imbalance between the two nations.
What Happened: Ishiba acknowledged the suggestion but emphasized the need for a more detailed assessment. He pointed out that while the U.S. is the largest oil producer, factors such as price and oil type need to be considered, in an interview with Nikkei on Monday.
The Japanese PM stated, “It is a possibility that requires further, more detailed consideration.”
“Oil is different from natural gas,” Ishiba said, adding, “You cannot just say, ‘Yes, we’re ready to buy a lot of oil from the U.S.'” This comes amid renewed concerns over Japan’s energy security following the recent Israel-Iran conflict.
Trump has been urging countries like Japan and South Korea to invest in natural gas fields in Alaska, a move Japan is considering to diversify its energy sources. The suggestion holds particular importance as Japan currently relies on the Middle East for 90% of its oil supply and recent tensions in the Strait of Hormuz have sparked concerns about energy security.
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Why It Matters: Japan’s consideration of Trump’s proposal comes at a critical time. The country has been engaged in trade talks with the U.S., with the looming threat of a 25% automotive tariff. Japan’s chief trade negotiator, Ryosei Akazawa, has previously expressed Japan’s refusal to accept these tariffs, further complicating the trade negotiations.
In an interview with Fox News on Sunday, Trump said the U.S. has a large trade deficit with Japan and suggested that Japan could help reduce it by buying more American oil and other goods.
Meanwhile, Trump’s recent announcement of his intention to set new tariff rates unilaterally for various trading partners through letters adds another layer of uncertainty to the trade negotiations. This move could potentially impact Japan’s trade relations with the U.S. and other countries.
Japan’s decision on the U.S. oil proposal could have significant implications for the ongoing trade talks and the broader trade relationship between the two countries.
On a year-to-date basis, shares of Exxon Mobil Corp XOM climbed 1.93%, while Chevron Corp CVX fell 1.99%, as per Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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