Japan's oil market is experiencing a historic shock: Japan's crude oil imports dropped -59% MoM, to 900,000 barrels per day in April, following the outbreak of the Iran War and the closure of the Strait of Hormuz. This comes as Japan relies on the Middle East for over 90% of its crude oil supply. Meanwhile, May imports are projected to rise +89% MoM, to 1.7 million barrels per day, or ~75% of pre-war levels. This recovery is expected to be supported by alternative crude procurement from outside the Strait of Hormuz, including US supplies and Saudi Arabian cargoes via the Red Sea, as well as shipments that transited the Strait in late April. The country has also conducted two emergency oil reserve releases to stabilize its market, with stockpiles now down to 202 days of supply, from 243 days at the end of February. Japan is scrambling for oil alternatives.(The Kobeissi Letter)