Tokyo Report | Diplomacy | East Asia

Japan and South Korea’s Energy Hedge

For Japan and South Korea, strategic bilateral cooperation has become essential to individual energy security. 

As the Strait of Hormuz blockade triggers fears of resource scarcity around the globe, Japan and South Korea are focusing on geopolitical necessity over historical or cultural frictions in order to secure their mutual energy needs. 

The closure of the strait, the world’s busiest energy chokepoint, is a systemic shock that is forcing many nations to identify alternative sources and plans for critical resources. For Japan and South Korea, strategic bilateral cooperation has become essential to individual energy security. 

In recent public statements, ambassadors of both countries stressed the importance of cooperation amid the rising uncertainties generated by the war in the Middle East. Last week at the Korea Press Center in Seoul, Mizushima Koichi, the Japanese ambassador to South Korea, emphasized that “solid Korea-Japan relations are not an option, but a necessity.” He also stressed the importance of Japan-South Korea-U.S.trilateral cooperation. 

Earlier this month, Lee Hyuk, the South Korean ambassador to Japan, stated in an interview with Nikkei Shimbun that “South Korea and Japan need to cooperate in the energy sector… the two countries need to closely consult in preparation for the Iran crisis.”

This was not mere diplomatic talk. Less than two weeks after the Strait of Hormuz blockade began, Korea Gas Corporation (KOGAS) and Japan’s JERA, the world’s largest liquefied natural gas (LNG) importers, signed a memorandum of understanding that supported both nations’ efforts at reinforcing energy security. The MOU includes a framework for additional cargo swaps – which allow either company facing a sudden shortage or unexpected delivery delay to exchange a scheduled shipment with the other – as well as analyzing ongoing supply and demand trends in order to optimize shipping and terminal operations. 

On March 24, QatarEnergy announced that it would have to declare force majeure on some LNG contracts, including for South Korea. Qatar is currently South Korea’s third largest LNG supplier, providing approximately 14.9 percent of the country’s total. While Japan imports less than 5 percent of its LNG from Qatar, JERA is heavily invested in QatarEnergy and remains vulnerable to the secondary risks of the blockade, such as extreme spikes in freight costs. As such, both nations are leveraging reserves and looking at fuel switching by maximizing other fuel sources, such as coal and nuclear. 

While the conflict in the Middle East is only accelerating, the KOGAS-JERA agreement is not a sudden pivot – these two energy giants have been carefully acknowledging the structural reality of their regional energy dependency for the past decade. By continuing to advance this partnership, both Seoul and Tokyo benefit from a practical insurance policy while Washington is increasingly distracted by its own domestic and geopolitical entanglements. 

Mizushima rightly brought up the United States as a key ally to both Japan and South Korea. But even as Washington remains the official backbone of regional security in East Asia, the blockade of the Strait of Hormuz demonstrates that a superpower’s promise is not a comprehensive substitute for a neighbor’s shared resources. A stronger relationship between Japan and South Korea greatly hedges against the risk of overreliance on the assumption of U.S. security guarantees, particularly when it comes to maintaining open international sea lanes. The current geopolitical climate offers no guaranteed maritime security for any state. 

The signing of the MOU on March 14 was witnessed by top industry ministers of Japan and South Korea, a deliberate signal of core national security priority for both governments. Historical grievances that have often interrupted the pace of their political relationship are being increasingly viewed as peripheral issues to contend with during times of relative peace and stability. As more states scramble to secure their own survival in an increasingly fractured global landscape, the world will likely see more bilateral agreements that prioritize systemic crises above domestic sentiments. 

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As the Strait of Hormuz blockade triggers fears of resource scarcity around the globe, Japan and South Korea are focusing on geopolitical necessity over historical or cultural frictions in order to secure their mutual energy needs. 

The closure of the strait, the world’s busiest energy chokepoint, is a systemic shock that is forcing many nations to identify alternative sources and plans for critical resources. For Japan and South Korea, strategic bilateral cooperation has become essential to individual energy security. 

In recent public statements, ambassadors of both countries stressed the importance of cooperation amid the rising uncertainties generated by the war in the Middle East. Last week at the Korea Press Center in Seoul, Mizushima Koichi, the Japanese ambassador to South Korea, emphasized that “solid Korea-Japan relations are not an option, but a necessity.” He also stressed the importance of Japan-South Korea-U.S.trilateral cooperation. 

Earlier this month, Lee Hyuk, the South Korean ambassador to Japan, stated in an interview with Nikkei Shimbun that “South Korea and Japan need to cooperate in the energy sector… the two countries need to closely consult in preparation for the Iran crisis.”

This was not mere diplomatic talk. Less than two weeks after the Strait of Hormuz blockade began, Korea Gas Corporation (KOGAS) and Japan’s JERA, the world’s largest liquefied natural gas (LNG) importers, signed a memorandum of understanding that supported both nations’ efforts at reinforcing energy security. The MOU includes a framework for additional cargo swaps – which allow either company facing a sudden shortage or unexpected delivery delay to exchange a scheduled shipment with the other – as well as analyzing ongoing supply and demand trends in order to optimize shipping and terminal operations. 

On March 24, QatarEnergy announced that it would have to declare force majeure on some LNG contracts, including for South Korea. Qatar is currently South Korea’s third largest LNG supplier, providing approximately 14.9 percent of the country’s total. While Japan imports less than 5 percent of its LNG from Qatar, JERA is heavily invested in QatarEnergy and remains vulnerable to the secondary risks of the blockade, such as extreme spikes in freight costs. As such, both nations are leveraging reserves and looking at fuel switching by maximizing other fuel sources, such as coal and nuclear. 

While the conflict in the Middle East is only accelerating, the KOGAS-JERA agreement is not a sudden pivot – these two energy giants have been carefully acknowledging the structural reality of their regional energy dependency for the past decade. By continuing to advance this partnership, both Seoul and Tokyo benefit from a practical insurance policy while Washington is increasingly distracted by its own domestic and geopolitical entanglements. 

Mizushima rightly brought up the United States as a key ally to both Japan and South Korea. But even as Washington remains the official backbone of regional security in East Asia, the blockade of the Strait of Hormuz demonstrates that a superpower’s promise is not a comprehensive substitute for a neighbor’s shared resources. A stronger relationship between Japan and South Korea greatly hedges against the risk of overreliance on the assumption of U.S. security guarantees, particularly when it comes to maintaining open international sea lanes. The current geopolitical climate offers no guaranteed maritime security for any state. 

The signing of the MOU on March 14 was witnessed by top industry ministers of Japan and South Korea, a deliberate signal of core national security priority for both governments. Historical grievances that have often interrupted the pace of their political relationship are being increasingly viewed as peripheral issues to contend with during times of relative peace and stability. As more states scramble to secure their own survival in an increasingly fractured global landscape, the world will likely see more bilateral agreements that prioritize systemic crises above domestic sentiments. 

Linda Jisun Lee is an independent researcher, writer and artist-curator. She previously worked at the RAND Corporation, directed a contemporary art gallery in Los Angeles, and lobbied at the United Nations Human Rights Council in Geneva, helping to secure the adoption of a North Korean human rights resolution. She holds a BA in International Relations and a Master's in Public Art Studies from the University of Southern California. ​​

Japan-South Korea energy cooperation

Japan-South Korea relations

South Korea energy security

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